What Does Brexit Mean For Debt Recovery?

Hold your horses, it’s yet another Brexit blog. It’s been a long time, and this Brexit thing doesn’t seem to have an end in sight. Since another deadline has passed us by, the people of the UK are still stuck in a state of limbo about pretty much everything. For business owners, this poses a lot of ongoing problems. Indeed, you could easily liken UK business owners right now to squirrels in autumn, frantically finding and storing nuts (goods and cash) to keep them going through the impending winter of Brexit. But how will Brexit impact a businesses ability to recover money it is owed, and what can you do to prepare?

The Uncertainty Problem

The biggest problem Brexit is posing business owners is that no one knows what on earth is going on. The uncertainty has gone on so long now that no one really knows what to expect from Brexit – just that we want it to be over. The only concrete advice business owners are given is to prepare for the worst – a no deal Brexit. There’s just one problem with that – no one knows what a no deal Brexit looks like. This makes planning for it a very difficult thing.

From a debt collection standpoint, now is a good time to get your house in order. This means checking over your payment terms to make sure they are airtight, so that no one can slip through the cracks. Putting a new set of policies in procedures in place around payment, negotiations and price structures will also help, along with ensuring all staff members are trained on the changes. If you work with clients on a credit basis, we also recommend running business investigations, analysis and background checks before bringing them on board – just to make sure they have the means to actually pay you, and intent to. This simple step can maximise your debt recovery and check on the financial health of your clients, minimising the risk to your business.

So What Will Happen To Debt Recovery Laws?

While it’s largely unknown territory, it’s highly likely that the collection of debts that have originated in the UK will remain the same. After all, UK laws are unlikely to change regardless of Brexit. But debts that originate in the EU could be a different story.  Since we don’t know what the negotiations will bring, it’s highly possible that leaving the EU will cause difficulties in customers paying debts, particularly if the UK economy slows down. Since there is a strong chance that the price of UK good and services will rise, with employment rising right alongside it. This means it will be more difficult for customers to pay, and for businesses to pursue successfully. For now, that means seeking payment as soon as invoices become due, rather than waiting until we leave the EU.

What Can Businesses Do?

While Brexit is still pending and negotiations are still underway, things will stay the same. That means if you have a UK debtor who has left to live in the EU, you can take advantage of the European Payment Order, which allows debts to be enforced across borders. That means that, for now at least, recovering debts can be a simple process – if you get some help.

At Debtcol, we work with business owners who want to protect their business and their cash flow, whatever the political landscape might look like. Not only can we help collect debts that are already overdue, but we can help you put policies and procedures in place to ensure it doesn’t happen again. Our experts can also work with you to conduct business investigation and analysis on new clients, so that you can be sure every customer you take on has the ability and intention to pay, and there are no red flags in their history. If you would like to know more, just get in touch with the team today.