But if you want your business to survive, you need to be able to claim that money back – otherwise you could end up with serious cashflow problems. So, what are your options for hunting that money down?
Emails, Calls and Negotiation
This is the first port of call, and the step 99% of businesses feel more comfortable doing. In some cases, just sending an email or making a telephone call can solve the problem. Your email might have gone astray, got stuck in a spam filter or simply been missed by the person on the other end. Equally, it helps you figure out if there is another problem that could be causing the hold-up – for example the accounts department misreading the payment date, someone being off sick or having left, or a bank snafu. Finding out these things helps you manage expectations a little better and resolves simple errors quickly and easily. And if it’s something more complicated, you can find out and deal with it.
If the debt goes unpaid for a longer period, you may need to negotiate. For example, if the client is having cashflow problems of their own, then it may be better for all involved to set up a payment plan or come up with a settlement figure that suits both parties. All of this can be easily done over the phone, in person or through letters, with an amicable result.
Mediation is when an impartial person, trained in dealing with difficult discussions between 2 opposing sides, act like a referee in a dispute. Mediation is one of the natural next steps if an agreement can’t be reached. Mediation companies are available for hire and can help facilitate a productive discussion and guide everyone to a mutual agreement. While this can cost a small amount of money, it’s much cheaper than hiring a solicitor and taking court action. Often the fee charged is based on how much is owed. If this is a route you’re interested in, the government recommends finding one through the Civil Mediation Council.
The other end of the spectrum is, of course, court action. This should always be a last resort, as it’s often difficult to piece a relationship with a client back together after you have taken them to court. You can claim for the unpaid invoices and late payment fees, interest and costs if your terms or statute allows. You could even make the claim online and save on paperwork and court fees. The courts may also offer mediation if both parties agree.
Hire a Professional
Whichever option you choose, you don’t have to do it alone. A professional debt collector will guide you through the maze of debt collection and help work out the best option for you, and how to do it. Often, hiring a professional to collect a debt on your behalf can be all that’s needed – an external voice can jolt a client into paying on its own, or the methods used can be different enough to resolve the issue without further action. So if you’re not sure what to do, bringing in a professional for advice could be the best option for you.
At Debtcol, we work with business owners who want to protect their cash flow and keep their businesses running smoothly. Not only can we help collect debts that are already overdue, but we can help you put policies and procedures in place to ensure it doesn’t happen again. Our experts can also work with you to conduct business investigation and analysis on new clients, so that you can be sure every customer you take on has the ability and intention to pay, and there are no red flags in their history. If you would like to know more, just get in touch with the team today.