Debt Collection Process for Small Business OwnersLast modified: March 14, 2023
Debt Collection Process for Small Business Owners
The number of small UK businesses has evolved exponentially over the last two decades, with a growth of around 72%. There are now around 6 million small and medium businesses in the country.
Small business owners have seen an increase in business activities in every sector, which has been the catalyst for this industry’s growth.
This is a great position for any company to be in, as increased cash flow is responsible for how well it flourishes. However, a rise in business presents more challenges related to finances and an increased risk of not getting paid.
Although getting paid on time is a must for small businesses, unfortunately, late payers are not out of the ordinary.
Some of the most common excuses for late payment include:
- Forgetting when the invoice payment date was.
- The accounts team are out of the office meaning the customer cannot pay.
- Having a financial issue that means they must put the payment aside.
- A cheque has been sent in the post but has not been received.
In some situations, having a formal conversation with the customer can produce reasonings for the late payment. Following this, a payment process can be agreed on for how the funds will be provided to you.
Many businesses will have credit control procedures in place, such as payment terms, that stop this from happening. Even if this is the case, no amount of procedures can prepare you for a customer that simply isn’t going to pay.
It is not uncommon for debtors to ignore lines of communication or move away to get out of paying the money you are owed.
Setting in motion the debt collection process when this happens will maximise the amount you recover.
We have produced this helpful guide to provide information on the debt collection process for small business owners in the UK.
What is the debt collection process for small businesses?
If a customer fails to pay invoices on time, this can produce a stressful situation for you and your business.
You may need to collect a debt from a customer that you trusted, which can be extremely disheartening.
In addition to the pressure of daily business operations, the debt collection process can be perceived as a time-wasting task to complete.
Business owners may be more inclined to abandon the debt to continue ordinary work that continues the running of the company.
In reality, a successful debt recovery result is reliant on having the experience and a certain set of skills.
Steps of The Debt Collection Process
The debt collection process essentially starts with you by sending the invoice and chasing the customer when payment is late.
If unpaid invoices are still ongoing after 30 days, authoritative action should take over the debt collection process.
A common example of this may be to take legal action against your debtor in the county court.
Despite how common this is, it may not be beneficial to your business and you may end up wasting time and money.
A professional debt collection agency is the best option for undertaking the recovery process.
Debt Collection Process for Small Businesses – Frontline Collections
The debt collection process for small business owners shouldn’t feel like a challenging exercise to carry out. A debt collection agency will provide you with confidence that your money is being recovered whilst daily business operations resume.
Frontline Collections are known for being the leading private debt collectors in the country.
Since 2005, they have provided a solution for debt collection services for small businesses with overdue accounts.
Our clients receive a service that is low-cost and one that produces an average recovery rate of 90% and above.
Due to the sensitive nature of being owed money, we provide your business with the utmost professional service throughout the debt recovery process.
We take pride in not jeopardising any existing relationships with your customers, meaning the future business can thrive.
No small business deserves to suffer from late payments; contact our debt recovery team of experts today!
Debt Collection Process for Small Business FAQ
What should I do when a customer fails to pay my small business?
You mustn’t panic when a customer doesn’t pay, as there are options available. Choosing Frontline Collections to collect the money is by far the most beneficial. However, having a debt collection process for small business can help.
Does it take a long time to recover a small business debt?
The time it takes to recover a debt is determined by its circumstances. At Frontline Collections, we recover debts as quickly and as efficiently as possible.
What is the debt collection process for small business owners?
Once you get in contact with our specialists, we will investigate the case and advise on the success of the recovery. If this can be collected, we will then start the debt recovery process.
How do you determine the success of debt recovery?
The success of debt recovery is based on how much information you provide and the circumstances of the case. For example, recovery costs may be more than it is worth if this is a low-value debt.
My debtor has disappeared and is ignoring me, what should I do?
We have a tracing system enabling us to track down the person if they disappear. It is common for debtors to use this tactic to try and get out of paying.