No Win No Fee Debt collection is becoming more important than it has ever been. This year has been more than challenging for UK businesses with the evolving COVID-19 situation.
As a b2b collection agency, we feel it is our duty to help businesses from all industries collect debts quickly. Despite the governments attempts to mitigate late payment with schemes such as the Prompt Payment code, companies continue to delay payments. Often using COVID as an excuse to delay payment even further.
But there are pre-emptive actions that your business can take that will reduce the risk of not being paid at all in these uncertain times if you are looking at hiring a collection agency.
A recent study showed 15% of businesses have to wait +90 days to get paid.
No Win No Fee Debt Collection
So we have put together some very critical steps you can implement in your business. This will take the bad debt pressure off your company, and increase the chances of No Win No Fee Debt collection having success, should it come to that.
1. Before doing business with someone.
Always credit check a potential customer, and get a feel for how they are trading. With COVID, you need to be wary of certain industries that are susceptible to decline such as hospitality, and retail. Do not take on large volumes of debt from these industries unless you are sure they have the financial backing. Perhaps 50% payment upfront and then 50% on completion/ delivery will mitigate the risk, at least for the time being during the pandemic. Always be wary offering lengthy credit terms.
2. Keep the relationship active
When you begin trading with a company, make sure you are in constant contact with people at the company. Radio silence is not a good sign! Before you even think about hiring a collection agency for No Win No Fee Debt collection you should have at least tried to speak to the debtor on more than a few occasions. Non-payment may easily be an oversight on their part, but it also may be a sign that they are closing-up shop and once that happens you will have to bear the cost if they cease trading.
3. Move fast after a certain period of time
You need to decide as a company what your cut-off line is for referring out to a collection agency for small business. Most businesses will chase for 90 days and then refer for collection, but our recommendation would be sooner than that. Have a rule that if no contact has been made within 60 days, the debt automatically gets passed for No Win No Fee Debt collection. You can’t keep wasting resources on chasing debts if there are no responses. Besides your credibility in chasing wains after 60 days, and the debtor will not take your threats of escalation seriously after that time.
4. Integrate debt collection fees into your Terms
We are always surprised how many businesses do not include this very simple suggestion of inserting a line in their Terms that should a debt not be paid within agreed terms, and the debt passed to a 3rd party for debt collection, all costs & interest are recoverable from the customer. Make sure they sign these Terms and also inform them on your invoices so they are always aware. That way, any fees incurred during the process of recovery, can be added to the debt without dispute, to get you back to a No-Cost situation.
Debt collector companies
So there you have it, a few nuggets to get you going, and ideas to implement in your business. We want to help take the stress out of No Win No Fee debt collection. You have to consider also that there a multitude of debt collector companies that offer debt recovery services. Just make sure you do your research on the best fit for your company.
Remember not all of them will make it onto your debt collection agency list, and that the cheapest commission doesn’t always mean the best service, or likeliest of positive results!
Hiring a collection agency
If you are looking at hiring a collection agency to provide debt collection services, we are always open for conversation. We can offer free advice by telephone call and guide you through any next steps. Or even look at legal options you might want to take to collect your debt. All no obligation – we are here to help.
We know that many 1,000s of businesses are struggling through the pandemic in 2020, so please contact us for help. Call us on 01332 565 350 or email enquiries@tauruscollections.com