The Reality Of Recovering Debts You Need To Know Your Business

Things You Need to Know When Recovering Debts

According to recent research, late payments are becoming an ingrained problem for businesses in the UK, as customers are delaying settling their accounts at a time of increasing economic pressure. One-fifth of invoices are still unpaid more than two weeks after they have been issued, while 6% are not settled after two months. Delays in receiving payment can adversely affect your business’s cash flow and damage relationships with customers, so it can be beneficial to understand your options if this situation arises.

As commercial litigation solicitors in Burton on Trent, Astle Paterson can support your business to recover overdue debts. But what do you need to know about debt recovery that can increase your chances of making a successful claim against those who will not pay?

Do Not Delay

Debt recovery is not always straightforward. To recover customers’ debts on time, it is necessary for businesses to track their payment activities so that any missing credits are not overlooked.

The quicker you contact the customer after their payment becomes overdue, the better your chances of collecting the money in full.

Often, a customer may have simply forgotten to make the payment, in which case a timely reminder – preferably by phone, so they cannot claim not to have received an email – is all that may be needed to prompt them. You will also be demonstrating that you will not tolerate late payments, thereby decreasing the risk of a repeat in future.

Keep Detailed Records

If you do need to take action against a customer for non-payment, it is vital that you have a detailed record of your interactions with them as evidence of your efforts to recover payment. This should include invoices, reminders, emails, and phone calls, which will strengthen your case when making a claim against the company.

Ensure Your Terms And Conditions Are Explicit

Prevention is always better than a cure so it makes sense to do everything possible to improve the chances of customers settling their invoices on time, rather than resorting to legal action to recover debts that could damage your relationships with them. Your business terms and conditions are an important safeguard as they can reduce disagreements by establishing your expectations from the outset.

Make sure your terms and conditions clearly stipulate what your customer should expect from you, and you from them. The customer should also sign the terms and conditions to confirm their acceptance.

Understand When You Are At A Dead End

Unfortunately, not all debts can be recovered. Even with the most thorough and efficient credit management, on occasion, customers may not be able to settle their debts. Unexpected cash flow problems or bankruptcy may mean that, on rare occasions, a customer cannot settle their accounts in full. However, by taking stringent preventive measures, you can safeguard your business against potentially uncollectible debts.

Take A Tough Stance

Finally, it is important that you take a firm line with customers who neglect to pay. Late fees and interest should be charged for late payments and make sure this is clearly stated in the agreed terms and conditions.

Need To Recover Outstanding Business Debts? Contact Us Today

As Commercial Litigation Solicitors, Astle Paterson can help you to recover unpaid invoices and guide you through the options when making a formal claim against a customer.

For more information, please contact us at 01283 531366 or send us an enquiry.

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