UK Guide to Debt Collection
Overview
"It's just that we need both directors need to sign the cheque, and one of them is away for two weeks."
"The cheque is in the post."
"The computer is down."
"We don't appear to have received your invoice - can you send a copy?"
These are all common and uncreative excuses. More often than not they are just delaying tactics.
Even very large businesses do not pay their bills until they have to, as it can be a cheap way to get a loan from you. Seldom is late payment is because your customers are insolvent.
For many businesses, outstanding invoices are their biggest asset. Overdue bills are a time-consuming nuisance, expensive to collect on your own and a distraction for you and your staff. A collection agency can efficiently help recover overdue debt for you. Once a third party is involved it is often the case that debtors pay faster.
The debt collection industry is professional and very large (£3 billion turnover representing some 17 million claims are collected annually). There are several groups of collection agencies:
- divisions of accounting, law and credit insurance firms
- divisions within large credit information services companies
- small to mid-sized independently owned companies
- services offered by individuals (only few of whom are responsible for the negative debt collection image).
Factoring is an alternative service, and depending on your needs, more comprehensive than debt collection (click here for more information on factoring).
Collection agencies need to be licensed by the Office of Fair Trading and are regulated under the Consumer Credit Act 1974 (and subsequent regulations). There are also strict laws disallowing harassment and other inappropriate means to collect overdue debts.
We have partnered with the most reputable and professional debt collection agencies in the industry, Avonmere. They operate a money-back guarantee, and they have a fully automated debt tracking system.
