Your Options If You’re Owed Money

If a client owes you money, it can be a difficult thing to manage. Whether it’s a small amount or a substantial sum, it can still cause a lot of awkwardness between you. It’s just one of the reasons many business owners are so reticent to actually chase down money owed to them, or follow through with threats to collect on those debts. But if you want your business to survive, you need to be able to claim that money back – otherwise you could end up in serious cashflow problems. So, what are your options for hunting that money down?

Emails, Calls And Negotiation

This is the first port of call, and the step 99% of businesses feel more comfortable doing. In some cases, just sending an email can solve the problem. Your email might have gone astray, got stuck in a spam filter or simply been missed by the person on the other end. Equally, it helps you figure out if there is another problem that could be causing the hold-up – for example the accounts department misreading your due date, someone being off sick or having left, or a bank snafu. Finding out these things helps you manage expectations a little better, and resolve simple errors quickly and easily. And if it’s something more complicated? You can find out and deal with it.

If the debt goes unpaid for a longer period, you may need to negotiate. For example, if the client is having cashflow problems of their own, or is going into liquidation, then it may be better for all involved to set up a payment plan, or come up with a settlement figure that suits both parties. All of this can be easily done over the phone, in person or through letters, with an amicable result.

Mediation

Mediation is when an impartial person, trained in dealing with difficult discussions between 2 opposing sides, act like a referee in a dispute. Mediation is one of the natural next steps if an agreement can’t be reached. Mediation companies are available for hire, and can help facilitate a productive discussion and guide everyone to a mutual agreement. While this can cost a small amount of money, but it’s much cheaper than hiring a solicitor and taking court action. Often the fee charged is based on how much is owed. If this is a route you’re interested in, the government recommends finding one through the Civil Mediation Council.

Court Action

The other end of the spectrum is, of course, court action. This should always be a last resort, as it’s often difficult to piece a relationship with a client back together after you have taken them to court. The courts will usually want you to go through mediation first, and only put a formal claim through if this hasn’t worked. You can claim for a specified amount of money, or an unspecified amount if you want to add things like late payment fees or damages. If the claim is for under £100,000 and owed by less than 2 people or organisations, you can even make the claim online and save on paperwork.

Hire A Professional

Whichever option you choose, you don’t have to do it alone. A professional debt collector can help guide you through the maze of debt collection and help work out the best option for you, and how to do it. Often, hiring a professional to collect a debt on your behalf can be all that’s needed – an external voice can jolt a client into paying on its own, or the methods used can be different enough to resolve the issue without further action. So if you’re not sure what to do, bringing in a professional for advice could be the best option for you.

At Debtcol, we work with business owners who want to protect their cash flow and keep their business running smoothly. 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.