Record numbers of firms are going out of business every day. Their demise is often caused by their inability to recover money owed to them. Thankfully, there are many options available when it comes to dealing with debtors.
If handled properly, firms can turn credit control into a profit making operation by recovering unpaid money in a way that earns more than enough to cover the cost of pursuing bad payers.
For example, businesses are entitled to levy a statutory late payment fee and charge punitive interest if invoices are not paid on time. If this doesn’t make the debtor pay, it may be necessary to issue a ‘court order for questioning’ against the company secretary.
This is often enough to prompt many late payers into action but for those who still refuse to budge, there are various legal options available.
However, firms should think carefully before agreeing to Individual Voluntary Arrangements as they can break down after only a few payments. Be wary too of debt management companies which may try to persuade you to accept less than you are owed.
Many firms, especially smaller ones eager to hold on to customers, have been reluctant to take action in the past.
However, attitudes have hardened during the economic downturn with more and more companies refusing to allow bad debt to threaten their business. The best approach is to get good legal advice and act quickly.
Please contact us if you would like more information about credit control and debt collection.
