Recovery of business debts

How businesses can increase cashflow by recovery of business debts

When you own a small business, you don’t have time to deal with bills and recovery of business debts after they turn sour. You’ll just end up losing more precious time and money, even if you do collect your debts in the end. Being prepared for late-paying customers is an important part for the successful recovery of small business debts. Quick action is key to maximizing profits and minimizing any losses in a small business.

Early Recovery of Business Debts

If you’ve built up some little semblance of rapport with your customer base, we know it can be hard to just simply send a collection agency after them and force them into a corner, but you have to think about the future of your company and not be distracted by individual cases, all debts must be paid.

The first action you should take is to send invoices including late fees before their payments are due, so if they do not respond to that letter, for whatever reason, that is their failed responsibility. You can let the customer dictate the rules of payment, if they cannot pay their bill on-time, then they must commit to some type of repayment schedule to show that they are serious about paying. This is how debt collectors can make the recovery of business debts a much more reliable transition for you, so that you can focus on growing your company.

As long as you have made the kind gesture to the customer that their payments are due soon, there is no reason for them to think that you are a company of no compassion. A customer that is serious about paying will always prefer to go through you before having to deal with a third party bill collector, so always use this opportunity to play a good cop/bad cop scenario with them.

Let the professionals handle it

After exhausting your own resources in-house, you just have to concede that there is nothing you can do at this point that will make it worth chasing the debts on your own, so you really have no choice but to hire a debt collector that can take further steps that will enable you to recover as much of that debt as possible, unclogging your cashflow problems in the process. A complete recovery of small business debt is of course ideal, but even if you are only able to get a reduced settlement out of customers that went cold-turkey on you when all attempts at communication failed would be an amazing boost of cashflow and morale.

You could, of course, dedicate an entire afternoon to instigating legal proceedings for small claims court, if it really is just one major culprit causing you debt grief, but if that is just not a realistic scenario for you, recovery of business debts is best left to the professionals. While you take this journey as a small business owner, you will experience more instances where debt collection just becomes something you must factor and outsource out every quarter in order to keep operations running smoothly.

If you wouild like to discuss how a 3rd party can help you with recovery of business debts, please don’t hesitate to call us today on 0333 336 7196 or email

Outsource debt collections

Why businesses should outsource debt collections to professional debt collectors

Companies look to outsource debt collections when it no longer becomes worthwhile to handle everything internally, taking away precious time from other tasks and stunting growth. When should you decide to call the professionals? The answer depends on how big your business is and the rate of success you have with collections.
Unless you’re one of the lucky few, a third party debt collector is going to be able to deliver higher success rates of partial and full debt collection from overdue customers than you can by yourself. The reason behind that is simply due to human nature. There are going to be customers who never planned on paying their debts and do not feel obligated to heed to your calls and letters.

Boss needs a vacation


Start-up businesses know the importance of time-management. If you suddenly have a spike in late payments, you have to address those problems immediately, all the while handling the core mechanics of your business. Even if you have an amazing team, things can quickly spin out of control and those debts will start seeping into your revenue stream, because you can’t collect fast enough.
Outsourcing is, for the most part, always going to be a cheaper alternative to whatever you can handle internally. After you have already made the usual courtesy letter and phonecall of “pay up”, you should have a team of professionals that can take things from there and get the customer’s attention. At this point it might be worth considering to outsource debt collections.

Taking your kindness for a weakness

One last important point to make about internalizing debt collection, and the argument to outsource debt collections. If you, as the owner, are calling up your customers who either feel too ashamed or too uncomfortable talking about their late-payment behavior, they’re going to try to avoid you. This is wasting your time and your money, the longer you wait to collect debt, the less likely you’ll ever see that money. Outsource debt collections specialists can keep things civil, yet resolute, with a clear message about payments. They will get the best results because their business relies on your business.
There are plenty of companies that specialize in outsource debt collections online and they can provide advice on what is best for your business and what type of tools and resources they can offer you. This should be a long-term investment relationship and not just an emergency band-aid. Prevention is the best way of handling collection of commercial debt.

Cashflow for businesses

Why cash flow for businesses is crucial

Time is money, and for small businesses any wrestling around with debt collection could leave you on the losing end, even if you get your dues.  Having a game plan before the problem of a non-payment from a customer is important, no matter how great your customer base is, it can mean the difference between life or death-of a business.

Maximizing Profits while Minimizing Losses

Your first goal, no matter how likely or serious the customer is about paying their debts owed, is to move fast and keep a strong resolve.  When considering cash flow for businesses, you shouldn’t play favorites or treat any debts as a special case.  Immediately send invoices and pursue late fines and make it urgent that they contact you about making payments.  If you try to be too personal and allow them to drag out their responsibilities over the phone, you are going to be less likely to collect and more likely to be wasting your time.

On the contrary, if you have sent invoices and left them messages, it is important to allow time for a response, otherwise this will scare them off and make them think it’s too late and they might just ignore your attempts to contact.  The customer would rather speak with you than a third party collector, so use this opportunity to make them feel comfortable, but get them to commit to paying something before hanging-up.

Cutting your loses, so you can get back to business

When your own personal attempts to collect have been exhausted, then you must hire a collection agency that can continue the steps that will give you the best chance at collecting your money and putting it back into your cash flow.  Whether that means settling for a reduced cut than what is owed, it doesn’t matter at this stage.  The customer is either someone who has no intention of paying or cannot afford to pay the full amount, so you shouldn’t try to squeeze blood out of a stone.

Cash flow for businesses has never been more important.  You must weigh the options of taking it upon yourself to file a lawsuit and spending a day in small claims court or using a third-party that can offer you more tools to reinforce your internal operation and outsource further debt collections as you see fit.  As your company grows, so will the issue of debt collection, so be prepared and model your needs for the long-term, then you will no longer need to divide your time away from what’s important: making money!

If you are having cash flow problems in your business and would like to chat about debt collection, or our popular invoice finance scheme as a more sustainable solution, please don’t hesitate to contact us on 01332 565350 or email

Collection of business debt

Why collection of business debt is crucial to your company survival in 2015

For small businesses, problems with collection of business debt is not a matter of ‘if’, but ‘when’ you will have to deal with it.  It can lead to the ultimate downfall of a company if you are not diligent and proactive about it.  How you navigate this potential minefield is the difference between being sucked-dry of all income or relegating debt to a simple accounting figure.  Being proactive and spotting problems before they become too big, or even before they happen at all is a major key to success.

Accounts Receivable

In bookkeeping, this is what they refer to as debt, or payments that are owed to the business.  You could just simply call up these debtors and demand your payment, or you can have a system in-place that can increase your success-rate of collecting business debt.  The key is in being able to collect your debt, without having to pay more money to get it.

Late Paying Customers

You’ll find that the majority of customers are going to go quiet on you when it comes time to pay their debt.  Those that do attempt to pay, even if they are unable to pay the full amount are easy to work with; late payment is better than no payment.  If the customer is one who has gone silent and hasn’t talked to you about why they haven’t paid their debts, it is important to exhaust all your options first before jumping into litigation.

First, you should try as soon as possible to contact those who may be at-risk of defaulting on their payments and try to keep the lines of communication open.  If you just send out repeated letters demanding payment, chances are they will never follow-up and drag it out as long as they can.  Before you hand your debt collection duties off to an agency, try to be as personable as possible to the debtor, this may be seen as going out of your way to collect a debt, but for a small business, every victory counts, those debts add up fast.

Hire a collection agency

This is simply the natural progression for collection of business debt and your best hope to get through a non-responsive customer.  The reason why it is important to act quickly and try to collect your debt before moving on to this step is because you will only be collecting about half of it through an agency.  Something is better than nothing, of course.

Small claims court

This can be an alternative to hiring a collection agency.  Don’t pay attention to those court TV shows, the cases often appear longer than how long it actually takes to reach a verdict.  Small claims will often cost very little to collect, in comparison to hiring a collection agency.  More than half of all small claims court cases are on behalf of small businesses, so that should give you an idea of how advantageous they can be for collection of business debt.

Credit checking for companies

Does your business have a credit policy?

Most businesses know the importance of a business plan to get your business off the ground. And a marketing and sales plan to grow your business. But what about the next stage….collecting cash. This is THE most important stage if you want to stay in business.

A credit policy can set-out clear objectives and guidelines to your staff.

Here are 3 things you should include in a credit policy when considering doing business with new customers:

• Credit checking – every customer must be fully credit checked and tested prior to offering credit. There are plenty of online systems to check a businesses credit history.  Remember credit is a privilege not a right.  Also why not phone your potential new customers previous customers and ask if they paid on time, as support to your credit check.

• Credit limits – how much credit do you want to extend to your new customer. Start off low and then build up once you know they can pay on time, you need to build trust and this is when you can extend credit. Any earlier and you are placing your company at unnecessary risk.

• Contact forms – each new customer must complete a saved template contact form, signed by their MD. This information should contain details such as: Accounts Payable contact, all email addresses, telephone numbers, fax, alternate trading addresses, mobile numbers – this detail will be invaluable if your customer ever defaults on a payment, as fast contact is critical to resolving any queries and ensuring timely payments.

This list is not exhaustive when it comes to a credit policy, but these are important considerations your Credit Department or you as a business-owner should be thinking about when you do business with a new company.

Are credit management techniques used in your business? Do you set credit limits? How strict are you with your customers if they fail to pay on time?

Recovery of business debt

Recovery of business debt – are your procedures in place?

As we settle into the full swing of summer, your organisation should be thinking about maximising recovery of business debt by ensuring your staff are following correct procedures and your invoices are pushed to the top of the pile by your customers.  Holidays will soon be underway, and with staff absences for the next 2 months, now is the time to make sure your collections procedures and invoicing is a priority in your business.

See below 3 top tips we have learnt over the years dealing with recovery of business debt for our clients, hopefully you will find this useful and can implemented into your company:

  • Invoice quickly – to be efficient in the recovery of business debt, you will need to be fast.  Once a job has been completed, invoice your customer straight away.  Faster invoicing = faster payment. Simple.
  • Be clear on payment terms – try and discuss with your customer prior to starting any work how you would like to be paid and how fast (7, 14, 30 days).  We would always recommend 14 day terms as average, because the longer your customer has to pay you, the more problems that may arise in that time, and your cashflow could be impacted.
  • Invoice as Notice to Pay – design your invoices so they look like they should be paid.  This is a strange one, but many invoices we see have very little information and this discourages customers to pay them fast.  At the very least you should include: your bank details for BACS, telephone number for Credit Card payment, telephone number for queries, address to send cheques to.

If you are considering the best way for your business to optimise its recovery of business debt, try implementing these changes to your collection and invoicing procedures and you should see more payments, paid faster.

The list is not exhaustive, and there are lots of ways you can improve collections and reduce debtor days.

If you would like help with recovery of business debt or for a no-obligation chat about any of our outsourced credit control services to improve your cashflow, please don’t hesitate to contact us on 0843 309 1633 or email


Poorly piggy bank

RCP Recommendations for Working Constructively with Customers with Mental Health Problems

Credit collection is rarely easy, whether you’re working with a debt collection agency, or whether it’s part of your job as an employee or owner of a business. It can be difficult to collect money from debtors regardless of the situation, but if you are working with a debtor who has a mental illness or is affected by another problem such as addiction, it can become a great deal more complicated. The Royal College of Psychiatrists has identified a number of “best practice” solutions that can help make the process easier for collections staff as well as the customer, with more favourable results for both.

One in four UK adults will be affected by a mental illness in their lifetime, and 50% of UK adults who have debt problems have a mental illness. There’s a strong and clear link between mental illness and debt, and the link goes both ways: people with mental illnesses are more likely to have unmanageable debt, and people with unmanageable levels of debt are at risk of developing certain types of mental illness. As well as this, someone with a mental illness has a much higher risk of experiencing severe stress and anxiety, and greater strain on personal and professional relationships, as a result of unmanageable debt. It’s also worth noting that people with mental health issues also have an increased risk of developing an addiction to alcohol or illicit drugs, which can further compound both mental health and debt problems.Poorly piggy bank

Sensitivity Training for Collections Workers

In response to this problem, The Royal College of Psychiatrists, together with the Money Advice Trust and Rethink Mental Illness, developed a short training course for staff, managers, and business owners who are involved in debt collection and invoice recovery. Collections employees in many large organizations have undergone such training, including those in banks and debt agencies. Training can include in-house sessions, e-learning modules, and public training sessions, depending on the requirements of the individual or company, and is designed to help credit collections staff deal effectively and sensitively with debtors who have mental health issues.

In addition to the training course, the Royal College of Psychiatrists developed a set of guidelines for collections staff working with debtors affected by mental illnesses. Both the training course and the guidelines were created using survey data obtained from collections staff working for organizations such as banks, credit card companies, and mortgage lenders.

Included among the recommendations from the Royal College of Psychiatrists are suggestions that business owners and debt collection agencies do the following:

  • Develop a comprehensive policy that outlines staff responsibilities and options for dealing with creditors who are affected by mental health problems;
  • Ensure that the policy includes disclosure to customers so that they’re aware that they can share information about their mental health and be confident that the information will be used appropriately;
  • Provide staff with sensitivity and awareness training in keeping with collections policy.

Why is Sensitivity Training Important?

For collections staff, deciding how best to recover debt from a customer with a mental illness is an extremely common occurrence: on average it happens every 30 seconds in the UK. While collections staff aren’t trained medical or mental health professionals, it’s still important to understand the link between mental health and debt, and understand the problems that sometimes make it more difficult for people with mental illnesses to manage their finances. Firstly, it’s important simply because of the need to treat all customers fairly and with respect, and secondly, because sensitivity training that helps staff deal with people in such situations can help them recover debt more effectively.



Mental Health Debt. “Lending, debt collection, and mental health: training and guidance for creditor staff.” Accessed June 18, 2014. Collections staff sensitivity training.

Mind. “Still in the Red: Update on debt and mental health.” Accessed June 18, 2014. Guidelines for good-practice debt collection.

Money Advice Trust. “Debt and Mental Health.” Accessed June 18, 2014. Link between mental health and debt crisis.

Recovery Resource Directory: Treatment 4 Addiction. “Treatment Programs for Alcohol Abuse.” Accessed June 18, 2014. Problems relating to substance addiction.

Royal Bank of Scotland. “A Guide to the Lending Code.” Accessed April 28, 2014. Information on debt help.

RoyalCollegeof Psychiatrists. “Debt collection and mental health: ten steps to improve recovery.” Accessed June 18, 2014. RCP recommendations for debt collection.

How To Collect A Debt From A Client

The Best Ways to Chase Overdue Invoices For Small Business Owners

One of the biggest stresses faced by freelancers, small business owners, and other people who work for themselves is chasing overdue invoices and recovering other monies owed to them. In fact, many freelancers report that they spend more time chasing monies owed for their work than actually completing the work at all. Chasing payments is awkward, embarrassing and, more importantly, it’s costing you money! Looking for a few hints and tips on dealing with the problem? Here are a few quick and easy solutions:

Be As Clear As Possible  

It’s understandable that occasionally some companies and individuals can struggle to pay their invoices on time, and that that can lead to a large amount of stress and anxiety for them and you.[1] More often, however, the money to pay you is available, but your ability to receive it is being delayed by process and red tape. One way to cut this red tape is to ensure that your invoices are as clear and easy to understand as possible: don’t assume the person in payroll will know who you are and what you’re invoicing for.[2] Lack of information could delay the payment process, leading to unnecessary stress for you. Your invoice should always include your name and company name, all of your contact details, payment terms (usually 30 days) and details, and a description of the work you have carried out. Make it as specific as possible including dates when the work was carried out so that the value you are adding to the business is laid out. This means the company you are dealing with has no excuse not to pay you on time.

Pick Up The Phone

Nothing wrong with your invoice but still haven’t received your payment? This is the part of the invoicing process people generally find the most awkward. Although it requires being more forward than you might like, the best way to deal with this problem is to pick up the phone rather than fire off another email. It is interesting to note that the law says an invoice is late if it hasn’t been paid after 30 days, and that you are able to charge ‘statutory interest’ on any overdue payments- this is 8% plus the Bank of England base rate[3] for business to business transactions.[4] Knowing your rights is important before you pick up the phone to call your client, and you shouldn’t be afraid to assert them. It is also worth having a digital copy of your invoice to hand before you pick up the phone, so that if the payroll department claims they haven’t received your invoice you can email it over whilst they are still on the line. Preparation is key before you pick up the phone: you need to know what you want, when you want it, and what your next steps will be if the company is unable to meet these demands.

Time to Stop

If you remain unpaid after a significant period of time (say, 30 days after the originally payment terms period has expired) and you are still carrying out additional work for your client then it’s time to put a stop on their account, and stop generating work for free. It’s important that you know your worth:[5] Small and Medium Enterprises (SME)[6] like you make up 99% of all UK businesses, and without good cash flow many of these businesses will fail. 44% of young SMEs have run out of cash or come very close: don’t let your business become one of the statistic that fail because someone else can’t organize their cash flow!

Sick of dealing with late or nonpaying clients and want to remove the problem so that you can focus on more important aspects of your business?  If you need help in your business to improve cashflow and implement some quick debt collection strategies, please give us a call to see how we can help you out, please email or call 0843 309 1633


[1] “How to recognise and deal with debt stress”, money

[2] “Show me the money: Our guide to payment chasing”, Freelance Advisor

[3] “Bank of England maintains bank rate at 0.5% and the size of the Asset Purchase Programme at £375 billion”, Bank of England

[4] “Late commercial payments: Charging interest and debt recovery”, ,

[5] “Facts and Statistics of Invoice Finance – A Lifeline for SMEs Infographic “,,

[6] “What is an SME?”, European Commission

Quick Debt Collection

Quick debt collection – how to identify excuses and then get your customers to pay!

Each month we see Debtors coming up with different excuses to delay payment.  But over time we have learnt that there is an easier way to achieve quick debt collection when it comes to long-term late payers.

Below is a list of excuses and potential methods to implement in your business which should result in quick debt collection and improved cashflow for you and your business:

  • The Debtor is always busy or out of the office – this is a common tactic for delaying payments as the onus is on you to spend more time chasing them, and the Debtor knows you likely to put them to the bottom of the pile if they cannot be spoken to.  A method to work around this is to speak to a Senior Manager or fellow Director, perhaps another employee associated with the work you did for them and advise them of the situation and the urgent nature of the position.  Request an immediate call back, take their email and then follow-up with that person in 2 days by email.  A written correspondence chaser, such as this, makes it more difficult to ignore and is a formal request, as oppose to leaving a message which may never reach the right person at all.
  • The Debtor never received your invoice – another excuse, but can sometimes be genuine, and the best way to resolve this to enable quick debt collection is to have the Invoice ready to be emailed whilst you are on the phone.  Whenever you make a call you should always have a digital PDF copy in front of you, then just say to the Debtor, “I will just email you it now and then let me know you have got it” once they confirm on the phone, request immediate payment by asking for the next available payment run.  If that is not within 7 days, request an urgent one-off BACS transfer.
  • The cheque is in the post – this excuse is as old as quick debt collection itself and you should be ready and armed for this one!  Again strict procedures are required to ensure a fast resolution to this problem.  Ask them: date it was sent, exact amount sent, cheque number and whether it was sent 1st or 2nd class, then if it was more than 7 days ago request they cancel the cheque and either pay by BACS, or send 1st class today.  The good thing is here, they have admitted the Debt and an excuse such as Rate Query or Dispute cannot now be used to delay the payment further.

So these are just a few of the stories we here in our every day mission to ensure quick debt collection for our clients, and we hope this information is helpful to you and your business if (or should we say when!) you come across slow-payers.

If you need help in your business to improve cashflow and implement some quick debt collection strategies, please give us a call to see how we can help you out, please email or call 0843 309 1633

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