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Debt Recovery...

Debt Recovery...


Useful information to help you make smarter business decisions.

What to do if you haven't been paid.

Sooner or later every business will be in the situation of having to deal with a company that is being slow or refusing to pay. Whether it’s because they don’t have the funds, they disagree with your invoices or have another dispute, there are thousands of reasons why a company may not be paying you. Unfortunately you would be lucky to avoid having to use a debt recovery process in business today. Here are a few top tips of ours on debt recovery:


Action Prior to Debt Recovery

Enforce strict timescales

Many businesses don’t want to chase debt in case they upset their customers; however it’s essential to get paid so you must enforce your payment terms. If your customer doesn’t pay you on the last day of your payment terms, make a polite call on the day asking where the payment is. You can’t afford to be lenient with late payments, especially if you’re a small business. Keep up to date on payments and contact a company as soon as it’s late. 


The first thing to do with people who owe you money is to communicate with them. If they are a good business, they will contact you first if they are experiencing problems, however some companies may not realise a payment hasn’t reached you. Contact them and ask for an explanation and try to be sympathetic. If they have fallen behind, set up a new payment plan for them. Get it in writing and make sure they abide by it. However, if they can’t stick to the new payment plan you need to take a stronger approach with them. 

Keep channels open

If you haven’t already, open all payment channels to help your customers pay you. By having different channels as an option to pay they are more likely to be able to pay using at least one channel, even if it’s cash. By making it easier for them to pay you you’re effectively making it easier for yourself to get paid. 

Be persistent 

If you have contacted them and offered alternative payment plans and you still have not been paid, a contractual agreement has been breached and you have every right to chase it up. Being persistent is sometimes key, and can lead you to being at the front of a client’s mind when they get around to paying off their debts. 

Debt chasing letters 

Taking a slightly more formal approach, you could start by sending debt chasing letters of your own; or you could pay a solicitor to send the letters for you. These are just written requests for money stating that they are in debt. These can be recorded and will aid you if the case goes to court. Another option is a letter sending service. Creditsafe offer a letter sending service called Debt Chaser. We send the letters for you to save you time and money and you can choose from a range of templates to use and you can control how often they get sent out.

Follow through on threats

If you have threatened to withdraw your services, stop their credit or take legal action against a customer if they refuse to pay- make sure you follow through on your threats and ensure you enforce the same rules across your company. Business is business and if you have already given them a chance to redeem their debt and they still haven’t paid, you need to be harsher. Unfortunately there are also businesses out there who think they can take advantage, and by following through on your threats will also set an example. 

The Debt Recovery Process

If you have done all the above and still not been paid, consider the following options;

Use a debt collection company

Many businesses drag their feet over initiating debt recovery; the longer you delay, the more difficult it is to recover your money. Most good agencies will work on a ‘no collection, no fee’ basis so there are no up front costs to you. The Creditsafe system offers a solution called Debt Score to make it easier for you. It allows you to search for the company that owes you money, and you can then choose from our panel of Creditsafe endorsed debt collection companies to deal with your debtor professionally.  In the event that the collection agency is unable to recover your money they should be able to provide you with useful information when considering further action.

DO YOUR RESEARCH: No matter which route you choose, try to find external agents that understand your business and are happy to work according to service level agreements (SLA’s) set up by you. 

Going legal

A County Court Judgment (CCJ) can be obtained through the Court that orders a defendant to pay a sum of money to the claimant. It  is recorded on the Register of Country Court Judgments for six years. Taking a case to court should not be undertaken lightly and will involve making a payment to the court. The Court  will consider your case but will expect to see that you have taken all reasonable steps to secure the payment by other means. You should be aware that obtaining a judgement is not a guarantee you will be paid. Your debtor may still refuse to pay in which case you will need to enforce the judgement. There are many ways to do this including;

  • Using Bailiffs
  • Obtaining a Charge over property
  • Attachment of earnings
  • Oral examination and payment order

It is important to establish the best method of enforcement to avoid wasting time and money.

Sell the debt

In some circumstances it may be appropriate to sell your debts to a third party organisation for a percentage of the invoice value. Usually, the fee is quite low and the service only available to companies with a high value of undisputed debt.

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