Negosentro| Recovering overdue payments is never easy. As a business owner, you are perhaps plagued with many questions about what you can and cannot do as the creditor. There is always the dilemma that collecting debt could lead to losing customers. At the same time, writing off debt is bad for business and could hurt your profits. In this article, we will address some of the common concerns that business owners deal with when they are faced with unpaid debt from customers.
When is it worth pursuing delinquent customers?
Before you resort to any serious method of collecting debt, it is vital to determine first if it is worth pursuing. The amount owed is usually the primary consideration. But writing off small debt may have dire consequences, especially if the customer keeps doing it repeatedly.
Other factors to look into are the capacity of the debtor to pay. If your client is insolvent, you will have a hard time recovering payment. Another example is in the case of disputes. If your client refuses to pay because of an ongoing dispute related to the services or goods you provided, it is essential to resolve the issue first before attempting to collect payment.
When should you resort to hiring a debt collector?
Hiring a debt recovery agency like http://www.nightfoxinvestigations.co.uk is an affordable and hassle-free solution. These agencies are experts in handling all types of debt and have the necessary resources to chase after a delinquent debtor. Remember that debt recovery is both time-consuming and stressful. Instead of adding further strain to your business, you can enlist the help of an agency so that you can focus on business operations.
Resorting to this method depends on your company’s terms and conditions. You do not need to wait until the unpaid debt is overly delinquent. What matters here is whether or not you have exhausted all efforts on your part to recover it, yet the debtor fails to fulfil their obligation.
What do you look for in a debt recovery agency?
When you are comparing several agencies, you consider not only the services available, but more importantly, the agency’s reputation in dealing with debtors. Remember that the agency will represent your business; hence, their practices will also reflect your company. A reputable agency is always compliant with the laws governing debt collection.
When do you need to consider taking legal action against your debtor?
The standard process of debt collection involves several steps. Usually, you begin by sending demand letters and making phone calls. After exhausting all in-house resources available, you can proceed with hiring a debt recovery agency. If you fail to succeed, the last step is taking legal action.
The applicable court procedure depends on the amount you need to recover. Small debts are usually pursued through country courts, while the high court handles more significant claims. If it is categorised as a small claim, you generally do not need to hire a solicitor. But a solicitor is mandatory for more significant debt claims. In any case, you can always seek the advice of a legal expert whenever you have to resort to a court proceeding.