Time to act: 5 tips to recover debts and boost cashflow
With more than 50% of businesses expecting their revenues to fall by more than 50% over the coming months, now is the time to act to prevent further financial disruption.
According to Red Flag Alert research, a record 527,000 UK companies were already in financial distress in the second quarter of 2020, a figure swollen by the impact of the coronavirus lockdown.
Take a positive step forward
One of the biggest challenges to business is getting back control over cashflow, and debt recovery is now more important than ever, with local lockdown restrictions coming into force all over the UK.
Many businesses may have considered waiting until after COVID-19 has left us, but sadly that is not happening any time soon. And if you wait, you risk being at the end of the payment queue.
With any good debt recovery strategy, the tone and timing of collecting individual debts might be very different so it’s vital to consider all the elements of each situation. Here are a few tips that might help.
- Find out why they’re not paying
Is the debt disputed? Are they waiting for a payment from a supplier?
If you can find out the reason for non-payment, it might help you agree when and how a payment will be made and to assess whether there is an underlying issue.
- Check your contract
What are the contractual terms around payment? You may be entitled to terminate the agreement and/or stop providing goods and services until payment is made.
This might also give you scope for negotiating payment with the customer. However, before terminating or ceasing to comply with your obligations, check the contract carefully and take advice rather than risk being in breach of contract yourself.
- Check the company out
It’s often worth checking the company filings with Companies House. This will show the company’s most recent filed accounts and will also show if administrators or liquidators have been appointed.
There may be news or talk in the industry about the company and its financial position. This will help to inform your approach to recovering the debt.
- Try to agree payment or a payment plan
Using the information you have gathered through the above steps, try to negotiate a payment with your customer (assuming you can get hold of them).
- Hire a professional from just £50
Of course, there’s no point in throwing good money after bad. That’s why our debt recovery team work on a ‘no recovery, no fee, no hassle’ basis and we recover around 90% of B2B debts on average.
We can advise on the right time and best way to chase payment in a professional, quick and straightforward manner. We can investigate why the debt hasn’t been paid, check contracts, run company checks, arrange payment plans and issue claim letters.
Ultimately, we can save you a lot of time and stress and recover more of your debts, boosting cashflow in your business.
We offer a cost structure of either £50 fixed fee for debts under £10,000 and for any debt over £1000, we also offer a “no fee, no recovery” arrangement.
Whatever you decide, the sooner you take a positive step to rounding up your outstanding invoices the better.
To learn more call B2B debt recovery manager Beverley Oliver on 0191 211 7953 or email [email protected]