As a business, taking legal action with a client is always the last resort. Court action can be costly, time consuming and damaging to your customer relationships so it’s worth doing what you can to avoid involving a solicitor if possible.

That said, you must remain firm when it comes to debt recovery.  If a customer owes you money, you have every right to adopt credit control practices to pursue the overdue invoices – providing you don’t hassle your contacts or use illegal debt collection methods.

There are a few steps you can take before legal action becomes your only option:

  1. A great deal can be achieved through letters and emails.  By increasing the severity of each communication with a changing tone of voice and an increased sense of urgency, signed by the most senior people in your organisation, you’ll make it clear that late payment will not be tolerated in your business. 
  2. Decide how many communications you are prepared to send and make sure you are specific with the action you want your debtor to adhere to.  Tell them how many days they have to pay and explain the consequence, such as interest fees, if they do not pay by the deadline given.  On your final notice, explain that legal notice will be taken if your request is not met.  You’ll find, in the majority of cases, that the threat is often enough to generate a favourable response.
  3. If you are not already communicating with the most senior person in your debtor’s business, consider writing directly to the business owner, Managing Director or Chair.  Sending the letter from your own MD will make this even stronger.  If there are various people involved in the decision-making, don’t be afraid to write to three or four people at the same time, making sure each recipient is aware that the others have also received your communication.
  4. If, after a number of friendly prompts and professionally written communications, your debt remains unpaid, you should consider employing the services of a reputable debt collection agency.  Don’t wait too long to enlist their help because the older a debt becomes, the more difficult it is to pursue.
  5. There is another route you can go down if the debt becomes disputed and all avenues have been exhausted.  Mediation providers can help you resolve disputes out of court for less than it would cost to take legal action.

To find out more about debt recovery in the UK, contact the friendly team at P&J Consumer Debt Services.