What Are Business Debt Recovery Solutions?Last modified: November 20, 2023
What Are Business Debt Recovery Solutions?
In the UK there is a growing need for a robust business debt recovery solution. In 2020, it was reported that 4 out of every 5 small businesses were owed money from non-paying customers. This statistic shows that payment issues are a big headache for business owners.
Fortunately, there are many solutions to this issue, with internal and professional debt recovery services readily available. A service is available regardless of the size of a business, so both small and large companies can make sure that their cash flow remains strong.
Frontline Collections offers small business debt recovery solutions and has done since our opening in 2005. As such, we understand exactly what our customers are experiencing when they first come to us for help.
Business debt recovery should always be handled by experts. As such, we have listed the various options businesses have available to them when it comes to collecting commercial debt.
Business Debt Recovery Services
Legal action, credit control or debt collection agency – which one is the best for a business owner to choose?
Many businesses may already have a credit control process in place for recovering unpaid invoices. In other cases, the company might be small, or the owner may be acting independently. Businesses like this simply do not have the time or resources to pursue a debt alone.
Regardless of the circumstances surrounding the debt and its creation, there will most likely be a good solution. Here are several choices that are common options for business debt recovery.
Debt Collection Solicitor – Court Action
Taking legal action is the first step for many business owners when they are searching for a debt collector. Many seek to obtain a court order and later a county court judgement (CCJ). Often, the threat of legal action is enough to prompt the debtor into making payment.
Whilst this can be an effective commercial debt collection method, it does have its negatives. For example, court action is not a cost effective option. Some law firms can charge hundreds of pounds per hour for their services. Court cases can often take months to work through, increasing the cost.
This high expense can mean that court action is not an option for some businesses. This might leave them in a difficult position, with precious time wasted.
In-house Credit Control Process
Many businesses have an internal debt recovery process. Credit control and accounts teams are tasked with making phone calls and chasing customers for payment.
In some cases, this can be effective. Many customers are sometimes unaware that money is owed, and a polite reminder is often enough to prompt payment. However, there are always a few payers that will do anything to get out of debt.
When this happens, the credit-control team have few options and no leverage over the customer. Some businesses can pause trading or service to a debtor, but often this is not enough and the money cannot be recovered. Usually, when this happens a professional solution is sought out.
An internal debt collection process is always a good tool for a business owner to have. However, it is important to set a cut-off point for all efforts like this, as money and time could be wasted fruitlessly chasing a debtor down.
Professional Business Debt Collection Agency
Instructing an agency is one of the most beneficial business debt collection services available. A professional debt recovery agency provides an effective solution but at a lower cost than other options.
Many agencies specialise in a specific area or field, but often provide more services in addition to their core offering. For example, Frontline Collections specialises in recovering private debt, but can also provide tracing services for absconded debtors.
As well as this, a collection agency will take every step necessary to resolve the matter in an amicable way. This is critical for businesses of every size, as they will be able to benefit from the income from an enhanced business relationship.
Business debt recovery UK – Frontline Collections
Frontline Collections has helped hundreds of businesses, self-employed people and sole traders recover millions of pounds worth of unpaid debt.
Speak to one of our friendly debt collection experts now for a complimentary pre-action assessment of your debt.
Business Debt Recovery – Frequently Asked Questions
How do I recover my small business debt?
The best way to recover a business debt is to instruct a professional debt recovery agency. Many agencies specialise in a specific field and have a dedicated collection process that reflects this.
How can a company recover its debt?
There are several options for business debt recovery. These include an internal credit control process, specialist recovery solicitors or professional debt collection agencies. It is important to weigh up all of the options during a decision-making process.
How do businesses collect debt legally?
The best way to ensure that your debt collection process is lawful is to instruct an approved and accredited professional. Use companies that are members of accreditors such as the Credit Services Association (CSA) or the Financial Conduct Authority (FCA).
How long does a company have to recover debt?
In the UK, there is a limitation period of six years on debt enforcement. If the debt has not been recovered within this time frame, it is declared “statute-barred” and can no longer be enforced. However, if the debt is acknowledged or a portion of it is paid, the limitation period resets to the last date of either.
How much does business debt recovery cost?
This depends on the type of debt as well as its circumstances. Every case is unique and must be priced accordingly. The best way to find the cost of debt recovery is to speak with a collection agent who can provide a full breakdown.