Debt Collection

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redtreeland

redtreeland

Free Member
Aug 6, 2009
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  • #1
    I have a client whose invoice is now a month late (payment terms are 7 days) and they have failed to respond to all forms of communication.

    What is the best way of recovering this debt? As the amount owed is towards the lower spectrum of 3 figures I'm not keen to outsource this to an agency.

    Any advice would help. Please also share your experiences.
     
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    chasingunicorns

    Free Member
    Mar 19, 2011
    22
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    South East England
  • #2
    Hello. I run a small business. My accountant always advises the following for customers who are very late in paying invoices. Clearly you will have to take into account the chance that they will no longer be your customer after taking action - but who needs customers who don't pay anyway? You can download county court judgement papers from the internet. Print them out and fill in the details of your customer in the appropriate spaces, plus all your information. Sign the forms and send a copy to your customer, by Recorded Delivery, stating that, if they do not pay within (say) seven days of the date on your letter, you will send the enclosed forms off and begin proceedings. I have never had to begin proceedings. The suggestion that you mean business should work. A County Court Judgement will seriously affect any individual's chance of getting credit in future and potentially damage their financial record. I am not an accountant and there may be minor details that I have missed or which are slightly incorrect but if you check with your accountant, he will probably confirm that you can do all of this. Good Luck.
     
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    chasingunicorns

    Free Member
    Mar 19, 2011
    22
    6
    South East England
  • #9
    Hello. I run a small business and my accountant advises me to do the following if any customers are seriously behind in payment. Download County Court Judgement forms from the internet. Fill in all the relevant details and sign the forms. Take a photocopy and send it via recorded delivery post to your customer with a covering letter explaining that, if they do not settle their account within (say) 7 days, you will be sending the forms off. This has always had the desired effect for me on the (very few) occasions I have needed to use this tactic. Customers don't like CCJ's - they affect the ability to obtain credit and damage their financial reputation. Hope this helps.
     
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    garlex

  • #11
    NutPog said:
    I have a client whose invoice is now a month late (payment terms are 7 days) and they have failed to respond to all forms of communication.

    What is the best way of recovering this debt? As the amount owed is towards the lower spectrum of 3 figures I'm not keen to outsource this to an agency.

    Any advice would help. Please also share your experiences.
    Click to expand...
    If its low value. In the first instance. Write another letter, make it very formal and to the point indicating it is the last communication before you 'move the matter to litigation'.
    Head the letter in bold with 'Letter Before Action' State the simple facts in the letter about the job was done in on time to the order and mention the 7 day agreed terms.
    State that if payment is not received in your office withing 7 days you will as stated above "move the matter to litigation". That once you have done this all costs and interest from when the debt became due will be added to the debt.
    If you do not get payment and this has worked for me on many occasions, conatct the count court and get advice and paperwork to start proceedings, its the cheapest way but can take some time.

    Naturally, you need to check in the first instance that they have the ability to pay by doing a credit check.

    Regards
     
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    The Resolver

    The Resolver

    Business Member
    • Mar 31, 2006
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  • #12
    Some alternative embarrassment factor recovery tips IF the debtor is a business:-

    * If a shop/cafe etc, just walk in with the unpaid invoice and ask, in a loud but polite voice, for payment in front of customers. If not paid, ask why , and say will pop in a few days later if still not paid.

    * If it is possible to easily trace other customers of the debtor, then see my post here on Third Party Debt Orders. You can't do that until you have a judgment but can indicate to the debtor that you will pursue that option of recovery if he forces you to issue in court.
     
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    daniel.benson

  • #13
    Credit Minder said:
    This is our first post so it's a big 'Hello' to everyone out there.

    We don't think calling the debtor's bluff with CCJ documents is the answer to deliquent payers even though it has worked for chasingunicorns?

    What do you think?
    Click to expand...

    I agree, Some debtors who know how to play the system, will know this kind of tactic and you'll find you get no response from the debtor.
     
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    garlex

  • #14
    Its not a tactic, its a procedure that I have adopted and find works. Anyone looking for advice on the forum should always be wary of advice from people with a vested interest.
    My advice has a proven track record and costs the postage. CCJ's also work as companies do not want them on their records as I have made this point in previous posts.
     
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    daniel.benson

  • #20
    NutPog said:
    Would love to, except they're based over 200 miles away. Just a return journey plus my time is likely to exceed the amount owed... Any more suggestions? Please keep them coming.
    Click to expand...

    I believe there is a company called call credit that offer door to door collections, Do a Google search might be worth sending them over if they do individual clients.
     
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    DebtorsDatabase

  • #21
    NutPog said:
    Would love to, except they're based over 200 miles away. Just a return journey plus my time is likely to exceed the amount owed... Any more suggestions? Please keep them coming.
    Click to expand...

    Good morning

    Perhaps face-to-face is the answer but we are not so sure. The cost is likely be prohibitive in relation to the debt value and once again no guarantee of a positive result. There could also be doorstep aggravation and who wants that?

    By embarrassing B2B or B2C debtors or using strong / intimated collection deterrents against them does work but they can only be used if there are no customer goodwill / relationships to consider. We have no problem with such actions because real embarrassment / deterrents do work very well indeed.

    Time is passing by, the debt is getting older and the suggestions we are all offering the creditor point to stronger credit control procedures earlier in the cycle? That's our view, what is yours?
     
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