Answered: Your Most Burning Questions About Debt Collecting

In these tough times for businesses, debt collecting should be the priority for business owners.  Keeping a sharp eye on which sales are being paid-for is a critical part of knowing how to keep a company in business.  A sale isn’t a sale until the money is in the bank.

With that in mind, we have decided to try and answer some of your most asked-about questions when it comes to debt collection services.  There is a whole world of issues when it comes to debt collecting, but we have tried to simplify some of the notions so you can better run your company.

When should I refer a debt to a debt collecting agency?

We often tell our clients that once your invoices are beyond 60 days you should be considering using a collection agency for debt collecting.  Particularly if you have had no contact from the debtor in that time. The chances are your customer is avoiding you deliberately, and you need to act fast to get paid.  There is always a risk of customer insolvency, particularly during COVID-19. Many financial experts predict that a wave of business closures will ensue over the coming 6-12 months.  Time is of the essence if you are searching for debt collection services.

Don’t bury your head when it comes to debt collecting!

Try and remain in constant contact with late payers (by phone, email and letter). If you encounter a period of silence of longer than 2 weeks, you should escalate proceedings.  Speak to a 3^rd party debt recovery agency at this point. They can often recover costs, interest and any % commissions providing you have this in your T&Cs.

Small claims court fees vs debt collection fees, which is better?

Our recommendation is always the same, you should only go to court for debt collection as an absolute last resort.  Debt recovery solicitors will not want to hear us say that, but it is true.  You should always try and resolve matters before court. A good debt recovery agency will try and negotiate on your behalf pre-court, which means less costs for litigation.

Most debt recovery solicitors will make their “real” money from litigation proceedings. As business-owners you should be wary of cheaper offers of debt collection from solicitors.  Debt recovery solicitors’ primary goal is to litigate a debt, and this will cost you money, and won’t always guarantee you will get paid!

Our thinking is that debt collection fees, in a No Win No Fee situation, are a much more risk-free method of debt collecting when compared to small claims court fees.

Should I use a debt collection agency near me?

Debt collection services are available across the UK. A letter, phone call and email is often enough to collect a debt. Your focus as a business owner should be ensuring that debt collecting is their no.1 priority, rather than thinking is the debt collection agency near me. Testimonials are always a good way of verifying if you can trust a debt recovery agency.  This will also show if they have a good track record of expertise, and success.

If you would like to speak to one of our agents about debt collecting and to help your business through the pandemic in 2020 and beyond, please don’t hesitate to call us 01332 565 350 or email enquiries@tauruscollections.com