Debt Recovery Recommendations

Lizbetty

Good morning!

We are really struggling with a couple of companies dragging their feet to pay at the moment. They're not in trouble financially, just stalling and it's causing us financial troubles. One is almost 2 months overdue despite regular chasing.

Can anyone recommend a good debt recovery firm please? It seems a bit of a minefield, we're in Yorkshire and so are the companies concerned. 

We're looking to warn them we'll instruct somebody to collect so I want to make sure we can go ahead ASAP if they ignore the warning. 

All recommendations are really welcomed! Sick of panicking now! 

The joys.

Many thanks! 

Lucyeff

donemedosh

A lot of companies run on a 90 day system before they pay the bill. But if they are passed that the best approach is to write a formal letter stating that they have a bill outstanding & it requires payment now. Then next write again informing them you will be taking legal action to recover the debt & that any legal costs incurred will also be added to the bill. The problem with debt recovery is they can charge from 25% to 50% of the bill. Have you thought of small claims court  (up to £10,000). Try your local citizens advice ctr I have found them to be pretty good in the past

penners324

Go to Money Claim Online. It's easy to use, no need for debt recovery companies 

CKhalvashi

penners324 said:

Go to Money Claim Online. It's easy to use, no need for debt recovery companies 

After following the LBA procedure, of course, which is writing them a letter giving 14 days to pay the invoice.

We have a few clients who are always later than we'd prefer (but do pay) who we aren't too worried about (as long as it's paid within a reasonable time), but if it's causing you cashflow problems, get a letter before action written and ensure you withhold further services until the debt is settled.

Lizbetty

Thanks so much, apologies for the late reply (usual chaos!). They did finally pay, thankfully. Thanks for the advice, I think we need to have a bit of an overhaul to avoid this happening again and make sure we act a bit quicker next time and so I'll make sure we heed all the advice given. 

We do have quite a few who insist on 90 day terms, this was an admin issue however where the invoice kept apparently 'disappearing' and it took over 4 months to find someone who seemed bothered. The joys! ☹️

J_B

Simple advice ...

People who insist on 90 days ... build that into the cost from the start

People who don't pay .... don't deal with them again

GraceCourt

Don't overlook that there is specific legislation - the Late Payment of Commercial Debts (Interest) Act 1968 - that legally entitles you to add interest and fees to the amount outstanding, as long as the exact terms (interest and additional fees) charged are set out clearly and easily visible on the invoice.  It doesn't necessarily make debtors pay up any faster but it gives them a huge financial incentive to pay in line with the terms offered.

It's worth mentioning that The Late Payment of Commercial Debts (Interest) Act 1998 (Commencement No. 1) Order 1998 specifically makes relevant provisions of the Act applicable to small businesses.