How to Recover Money Owed to You – Top 5 Actions
10th November 2022
If an individual or business owes you money, then it is only fair that you explore all routes available to you on how to recover the debt owed to you.
Overdue invoices can quickly build up if not monitored, which can massively impact cash flow and cause financial problems.
If you struggle with bad debtors, acting quickly to recover any unpaid amounts will serve positively towards your cash flow.
As the UK’s largest debt collection agency, DCBL has put together this expert guide on how to recover money that is rightfully yours.
How to Recover Money Owed to You – Contents
- Impacts of Unpaid Invoices on Businesses
- Top Tips on How to Recover Debts
- How to recover money owed to you by instructing DCBL
Impacts of Unpaid invoices on Businesses
It is no secret that businesses will experience unpaid invoices at least once and some will even experience these regularly.
Some may put this down as a standard daily business encounter while smaller business owners may become anxious at the thought of just one unpaid invoice.
No matter your stance on this, it is imperative that you take action to recover money quickly to avoid further financial issues arising.
Knowing how to recover money when someone owes it to you is something all business owners should know.
In most cases, business transactions follow the process of:
- Agree on services
- You provide the service
- The invoice is sent to the client with an outline of the time frame to pay
- The client pays within the stated time frame
Unfortunately, in some cases, clients refuse to pay invoices or pay late, which can negatively impact the cash flow of individuals and companies.
The Federation of Small Businesses published an article that reported that 400,000 small firms have shut down since 2022 due to unpaid invoices.
Dealing with excuses for unpaid invoices can be both stressful and tiring. Some clients simply forget to pay their debts, whilst others leave invoices unpaid due to experiencing financial difficulties.
No matter the excuse, if you are owed money – you are entitled to claim it back.
Top Tips on How to Recover Debts
1. Stay calm and composed
If someone owes you or your business money, it is essential to stay calm. Acting irrationally, such as communicating negatively and ineffectively, will impact your chances of getting your money back
2. Send an email
Approximately 80% of unpaid invoices can be successfully collected through email reminders. Many debtors claim they forget about their outstanding invoices, therefore sending a series of reminder emails can encourage payments.
Many debtors do not pay their invoices due to financial difficulties, therefore taking a human approach and addressing your customer with kindness through your email copy can encourage payments.
3. Send a payment letter
If your debtor does not respond to your emails or they are undelivered, send a payment letter to their address.
Issuing a formal reminder letter to your customer provides an opportunity to encourage payments.
4. Make sure you include all details of the debt
When sending reminders of money owed by email or letter it is important to include all details of the debt. This can include how much they owe, the date on which they need to pay this by, and any other terms that you agree upon.
This ensures all information is transparent between the creditor and the debtor.
5. No reply? Give the customer a call
Calling your customer to chase outstanding payments gives them the opportunity to pay early or if the debt is overdue, it can inspire payments.
A phone call gives you the opportunity to explain to the customer that they owe you money and the chance to come to an agreement.
6. If the debtor fails to respond, send them an LBA
If all of the above have failed, you may consider sending your debtor a Letter Before Action.
An LBA is a formal letter that follows the court’s pre-court protocol. It is a formal letter that warns your debtor that you are serious about escalating matters if your debt is not settled.
7. Failure to acknowledge the LBA will mean further actions
If there has been no acknowledgement of the letter before action, then it is time to take further professional action.
DCBL is the UK’s leading provider Pre-Debt Recovery Services and High Court Enforcement. Get in touch today and speak with our experts!
8. Keep evidence of all documentation
The creditor is advised to keep evidence of all documentation relating to the debt as well as copies of emails and letters sent to the debtor.
Gathering all documents will help when speaking to a professional about the recovery of the debt and help your case in court.
9. How to recover money owed to you by instructing DCBL
At DCBL our main priority is helping you get back what is rightfully yours as quickly and efficiently as possible. Our strategically placed regional offices around the UK allow us to gain national coverage and carry out our services across the UK.
If you or your business are in financial difficulties due to disrupted cash flow caused by debtors, it is likely that you need a cost-effective way to recover your debt.
DCBL is a commercial debt collection company, that can help you recover your debt successfully and effectively.
DCBL works closely with our sister company DCB Legal, a specialist legal practice. If your case needs to escalate to legal proceedings our team of expert advisors is readily on hand to help.
If you are based in England or Wales and require expert legal advice, do not hesitate to take action by contacting our industry experts today for a free quote!