5 Tips For Dealing With Small Business DebtorsLast modified: September 2, 2021
5 Tips For Dealing With Small Business Debtors
Small business debtors are a constant issue for company owners, self-employed, and those classed as freelancers.
It is often the case with small businesses that debt is left idle or abandoned.
This is due to either the business owner or accounts receivable departments not having enough time or resources to properly chase the debt or the perceived options they have available to them.
For example, many people believe that county court action through a court hearing is the only option.
This is far from the truth, and there are many ways to deal with small business debtors.
In this article, our debt recovery experts provide us with 5 tips for dealing with small business debtors.
1 – Remain Calm and Be Professional
If a business debtor has not paid you, you will understandably feel annoyed and frustrated.
Despite this, you should adopt a professional tone throughout the debt recovery process.
All communications should be courteous, regardless of whether you are the debtor or creditor.
2 – Create Payment Terms and Conditions
The best way to deal with an issue of debt is to prevent it from happening to begin with.
Taking steps to ensure that payment terms are made clear to a customer before providing goods or services will help ensure that they pay on the due date.
This is a good way on how to control debtors in a business and sure that you are paid on time.
If the customer breaches these, you are within your rights to issue penalties according to your payment terms,
For example, this may be a late invoice charge if 30 days have passed since the due date.
3 – Send a Reminder Letter to Small Business Debtors
Every invoice you issue or agreement you make will normally have a payment date on it.
If a customer does not pay on this date, the best thing to do is to reach out to them.
You should allow a reasonable amount of time after the invoice due date and contacting them, a period of up to 14 days is appropriate.
Any communication should be polite and professional in tone, and you should send your invoice as well as any other relevant documents.
4 – Help Business Debtors Pay By Making It Easy For Them To Do So
Often, the debtor’s finances may be in a poor state, and so they will be unable to pay their invoices.
Things can be even more difficult if they have borrowed money to pay for your services, and now they owe money to another party as well as you.
If this happens, it may be appropriate to propose a payment plan so they can pay their balance sheet in a way that is affordable to them.
5 – Instruct a Professional Debt Collection Agency
If you are in a situation where a business debtor has not paid you and you have tried the steps above, it is better to seek out a professional mediation service to recover your money.
A professional debt collection agency will be able to recover your money in a prompt and low-cost manner.
Dealing With Small Business Debtors – Frequently Asked Questions
Can A Company Recover Money From Business or Individuals?
Regardless of whether your business debtor is a company or an individual, we can help.
What Is A Debtor In Business?
A business debtor is someone, either a person or business, that has withheld payment outside of what was agreed. In short, this is someone who owes a company money for goods or services that have been provided.
Can I Use The Small Claims Court to Pursue a Business Debtor?
Legal action through a country court is certainly an option, but it is worth considering the cost of doing this. Solicitors and court fees are generally very expensive, instructing a debt collection agency is significantly more effective and low-cost.
Where Can You Recover Debt From?
We can recover debt from anywhere in the UK, as well as globally thanks to our worldwide network of trusted collections partners.
How Much Does It Cost To Collect Money From Business Debtors?
Each case must be taken on its own merits and priced accordingly. For the best answer, speak to one of our debt collection experts today.