In the end, every company is confronted with the issue of a client who is unwilling to pay and refuses to cooperate with any efforts to settle the debt. If you’re a new company, it could represent the very first instance that you are confronted with the issue of late payments and been forced to think about the possibility of a debt collection agency in London, even if you have an established business and you have a good track record, late payment is likely to be a problem is so rare that you’re not sure about the best method to resolve the issue and collect the amount owed.
Late payment or bad debt?
It is important to recognize that there is an explanation for why you have not received payment. If the amount due isn’t disputable, the reason is likely to be because your client is facing financial difficulties. If they are in a position of not being able to pay, they’ll be unable to pay their other suppliers and some of them will also be thinking about the possibility of pursuing debt collection actions. It is crucial to act quickly and the longer you spend repeating the process of sending emails, letters and phone calls the lower your chances of recouping the payment. If the initial letter was unsuccessful then the second letter is likely to fail and a different supplier might have instructed an unrelated third party and received paid.
There will be an established credit control procedure and guidelines you must follow, and you have to ensure that the time the time when a late payment is a debt. It should be based on historical payment data and industry-specific information about payments. In certain industries and fields, payments after 60 or 90 days is common for construction companies for instance. It is recommended to enforce a rule of drawing an outline in the sand and deciding whether it is thirty days past the due date or 45 days past the terms or whatever is when late payments become debt and you should immediately report the account to an outside party to collect.
Debt collection solicitors
An email from an attorney is usually enough to convince the debtor to take action particularly if they’re threatened with court actions. The issue with solicitors is their cost they charge, and you must accept a fee of as high as 20% on any money that is recovered. There are solicitors who provide a letter-before-action service starting at PS2.00 However, these letters are intended to have very little effect and seldom lead to the payment you need, leaving the sole option of suing legal proceedings and paying solicitors’ fees to represent you in Court. It is also worth examining whether you’ll actually be paid once you have obtained an order in court. Lawyers do not take the time to thoroughly research the debtor’s financial situation and capacity to pay. Your Judgment may be among the 40 percent of CCJ’s that are never paid. You could have avoided the cash you’ve spent on legal costs.
Debt collection agencies
If you are deciding to initiate legal action, you should consider hiring a debt collection agency. Many agencies offer the no-cost no-cost service, which means there’s no risk of exploring this option prior to making a legal move. Contact from a third-party debt collection professional, be it a solicitor paid or an agency operating on a no-success no commission model, is usually enough to convince those who not wanting to pay debtors to pay. This may not be enough to collect payment from businesses or businesses that are struggling and are unable to pay, but that is one of the advantages of hiring an agency for debt collection. The agency’s investigations into the financial condition of the debtor as well as future prospects for trading and capacity to pay the debt may result in the recommendation to write off the debt and seek tax relief instead of paying Court and solicitor’s fees when there is no chance of ever receiving the money.
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