Small Business Debt Collection explained
Debt Collection is a valuable resource to any Small Business in the UK. It is estimated that hundreds of millions of pounds is recovered every year by Small Business Debt Collection agencies on behalf of creditors. Hundreds of thousands of businesses have gone bust because they failed to take action to recover what was owed to them.
The using of a Small Business Debt Collection Agency basically means the introduction of a third party to manage the situation. Long gone are the days of using expensive solicitors or simply writing off sums of debt. Cash flow is everything to most Small Businesses these days. Unlike banks and large institutions, SME’s cannot afford to write off debts.
For any size of Business appointing a Debt Collection Agency, it can be of such value in many aspects. Debt Collection has an extremely valuable role to play in the UK post covid and working with the best fit professional debt collection service can be priceless.
Small Business Debt Collection is an essential tool for any small business owner to consider in the modern-day economic climate. The pain of regret is worse than the pain of doing nothing at all.
Preventing a good customer turning into a bad debtor
Some basic things to factor into any situation is that at some point, most businesses experience cash flow issues. This can result in late payments to their suppliers. In fact, it can result in no payment to suppliers depending on how bad the situation is.
When it comes to late payment, there is a domino effect. A chain of cause that ripples down the business food chain. When a large company fails to pay a sub-contractor for instance, it can trigger a chain of non-payment of invoices.
Basic things a business owner can do to ensure they get paid is to check that the invoiced amount is correct. The purchase order used at outset is correct and you had made attempts to speak to their customer to understand why they have not been paid.
If all attempts at reasonable dialogue and engagement are ignored, it is probably time to call the professionals.
Customer not paid so what can I do?
Ensure you that you tried all reasonable efforts to contact your customer. If a customer has not paid there is always a reason why.
When all standard attempts at contact have hit a brick wall and there is no end in sight to a non-payment saga, appointing a third-party debt collection agency can expedite the situation.
Some supplier and creditors are reluctant to take action when owed money but this should not be the case. A Professional Debt Collection Agency can take the strain of being owed money and streamline the process.
Debt Collection Agency or Solicitors?
The simple fact that many firms of solicitors use Debt Collection Agencies tells its own story. Debt Collection Agencies are very often a far quicker method of recovering unpaid debts for Small Businesses. Small Business Debt Collection specialists know every trick in the book to ensure your debt is paid quickly.
Solicitors are more appropriate where there are heavily disputed cases between contractors and suppliers. Many Debt Collection firms are not experienced in dispute resolution.
The majority of solicitors charge per the hour and this can run into tens of thousands of pounds dependent on the debt size and the complexity of the case.
Choosing a debt collection agency
It is essential you know who you are dealing with. The old saying is that the best service gets the best results and this is true within the debt collection sector. It is important that if you are searching for the best debt collection agency then you compare apples with apples.
Any established and professional debt collection Agency will have reviews on review platforms. This will provide an insight into the integrity of that debt collection agency. Every agency will have its own specialisms and may cater for certain niches only.
There are a few hundreds Debt Collector firms in the UK. The majority are one-man bands or just a partnership. Well established companies can deliver a powerful solution to small businesses seeking a direct and professional service.
Best Debt Collection Agencies
Federal Management are touted as the UK’s leading Small Business Debt Collection Agency. A highly professional company that has been established for nearly 20 years and has won many awards for its prestigious debt recovery services. Their past clients are said to have included The Ritz and Manchester United Football club amongst others.
They do not just cater for large or prestigious entities; they are highly revered for the millions they have recovered on behalf of the UK’s Small Business communities.
For Debt owed to a Small Business from an individual, Frontline Collections are the famous name. They are the gold approved supplier of Private debt collection services to the Independent Schools Association such is their pedigree. They recover debt son behalf of services such as Veterinary practices, Dental surgeries and even Funeral Directors.
A low fixed fee service that has a massive reputation as being the best in the business for personal debt collection for small businesses.
Aren’t all Small Business Debt Collection Agencies the same?
No, never make the mistake of thinking this. As with any industry, there is the good, the bad then there’s the downright ugly!
Avoid any overly aggressive or unprofessional companies. Whilst a Debt Collection Agency does not need to be regulated by the Financial Conduct Authority, any Small Business Debt Collection Agency will be members of the Credit Services Association. This is the only trade association for the debt collection industry.
Remember, for the best outcome you need the best service. There was a debt collection news article recently where an Ambulance trust had to write off hundreds of thousands of pounds simply because they’d used the wrong, ineffective debt collection agency. They did little to collect the money and zero was collected teaching them that there are no short cuts to achieving a successful result.