There are many traits of behaviour that could alert you to delaying customers. Unfortunately, over 80% of businesses have fallen victim to late payments, which can cause many problems in terms of cash flow and time (and money) wasted chasing the debt owed to you. Common signals include:
- Client or customer are difficult to contact. Your emails, and phone calls are proving to be futile.
- They begin breaking promises to make payments
- Excuses are made early. You may notice them complaining about the contract or service you provide
- A reluctance to negotiate payment schedules
When you find it’s become too late and late payments are causing you a huge inconvenience, it might be time to call in the service of a professional debt recovery firm, or a solicitor. However, before it reaches this stage. Abacus Solicitors have produced this handy infographic on ways you can recover the debt yourself.
Debt collection agencies
Debt collecting agencies can certainly send out a strong message. Be wary though, as you don’t want to scare of your biggest customers with rash legal action.
Debt collection agencies also charge a percentage of any payments collected, that is on top of their flat fee. You may end up paying more than you expected in your attempt to prevent a loss of money, which can make matters worse.
A safer, more cost effective method would be to utilize the service of a solicitor. Often, all it takes is one phone call or a letter from a solicitor that proves to be a catalyst in making a quick payment through fear of legal action.
Debt Recovery Through Court
Court action will be the last resort due to the time and money involved. Sometimes, the debt owed isn’t worth going it to court for, as it may be more cost effective to simply write it off or come to another agreement with your customer.
Before going to court, ensure you have resolved all disputes which may have been complaints about the services or goods you provided. Failure to do may significantly reduce the chances of recovering the debt.
You also need make sure the customer has the money to pay of the debt. If they are in liquidation or in bankruptcy, the debt is can be stricken off
For debts over £25,000 you will need to go the high court. For debts between £5,000 and £25,000, claims need to be made in the County Court.
Although the steps in the infographic are usually enough to get debtors to pay up, sometimes the last remaining option is to commence with court proceedings.