Having outstanding debts owed to you is undeniably a stressful situation, and trying to figure out the best way to get your money paid only adds to that stress.
It is important to note that the best course of action in this situation is to instruct a professional debt collection agency to recover the debts; DCBL will act in a professional and effective manner, ensuring your client relationships are protected whilst collecting the money you are owed in a much shorter time period.
However, if you wish to attempt collecting these debts internally then consider our tips and advice on how you can increase your chances of achieving successful debt collection, taking some of the stress out of a difficult situation.
Before you start the debt recovery process, and even before you start discussing the issue with your debtor, you need to have a clear plan of what you’re going to do. From the initial conversation with the debtor, to how long you expect the process to take, you need to think about how you will recover the debt and the steps involved. Unfortunately, the process of conducting debt recovery internally can be a timely process…
Recent studies from the Department For Business, Energy & Industrial Strategy show that up to 1.5 hours a day are spent chasing late payments by the average SME, when this time should be spent on the growth of the business. Additionally, taking on debt collection by yourself is a cost-consuming and lengthy process, where 1.5 hours can soon add up to more.
If you take on debt collection in-house, then planning ahead means you’ll need to collect as much information relating to the debt, your debtor, and the circumstances as you can.
This should include the basics, such as:
- Debtor’s name
- Debtor’s current address, and previous addresses if possible
- How much is owed
- The terms of the sale and the services/products provided
- Original payment date, length of time that the debt has been owed
It is also key to have the appropriate documentation together, such as invoices, unpaid invoices, contract details (if applicable).
Another crucial element is to make sure that the debt hasn’t already been paid. Obviously, if you’re reading about successful debt recovery tips then you have probably already checked this. However, it’s best practice to double-check before investing time and money into debt collection!
Document As Much As Possible
As we mentioned above, having the right documentation is essential. Whether that’s invoices, emails, texts, contracts or other correspondence with your debtor, this is how you will prove that you’re owed the money.
This also means that you need to continue collating any further written communication you have about the outstanding debt, whether that’s an acknowledgement of the debt, or discussing further options.
Keep as up to date as possible and make sure the documentation is kept together
When you enter into a discussion with your debtor about the money owed, the way you communicate with them is significant. Make sure all communication, whether written or spoken, is clear and understandable.
If you speak to them over the phone try to ask open-ended questions as this will be more likely to lead to more information being offered by the debtor. Similarly, speak professionally and authoritatively: be aware of your tone of voice and the speed at which you speak.
Ultimately, you don’t want to confuse the debtor or escalate the situation.
Undeniably, having substantial sums of money owed to you is a stressful and emotional situation: you’ll probably be upset, anxious, perhaps even angry.
However, successful debt collection requires these emotions to be put aside, with a focus on the steps ahead and the process of collecting your money.
Being able to remain calm during conversations with your debtor will ultimately help the outcome of the situation and help ease the pressure and stress for everyone involved. Avoid confrontation or manipulative language when speaking to your debtor: try to maintain a formal yet pleasant tone.
This is even more significant if your relationship with your client or debtor is important and you don’t want to potentially damage your reputation. A successful debt recovery agency, such as DCBL, will emphasize protecting client relationships throughout the recovery process.
Check Contracts and Terms & Conditions
This step probably isn’t one that you’ll be thinking much about when you’re trying to deal with your debtor, but checking your contracts and the terms and conditions within them can make the process easier if it happens again. Doing this could also potentially help prevent these situations in the future.
Check through these carefully and change them for future customers if necessary, stating what will happen if you’re not paid, whether you’ll instruct a debt collection agency, how long the client will have to pay any outstanding debts before this happens, etc.
Choose The Best Debt Collection Agency
If you’ve applied these successful debt collection techniques and tried to collect the outstanding debts but with no success, then the next step is to contact a debt collection agency. Unfortunately, sifting through a large number of debt recovery agencies available to find the right one can be a challenge in itself.
DCBL is the market leader in debt collection, with a 98% client retention rate and a dedicated team of debt recovery specialists.
However, if you wish to shop around and explore other options, websites such as www.compare-debtrecovery.co.uk/ or www.expertmarket.co.uk/collection-agencies/7-best-debt-collection-services-in-the-uk can compare debt collection agencies to help you find the right one for you.
Now you’re at the stage where you need a debt collection agency to get involved, you need to act quickly. You are more likely to have a successful debt collection the sooner you get in contact.
Often, someone will try to resolve the situation internally; this typically involves multiple unsuccessful attempts to collect the debt resulting in a significant period of time passing. Once they then decide to contact a debt collection agency, this period of time has affected the retrievability of the debt, meaning the opportunity for resolution may have been missed.
This is why instructing DCBL at the earliest instance of outstanding debts will markedly improve your chances of successful collection.
When Instructing DCBL (or another Debt Collection Agency)
Have Your Information Ready
Similarly to our first point earlier on, planning ahead and having as much information about the debt and the debtor on hand will increase the likelihood of achieving a successful debt collection. Your debt recovery agency will need information such as the debtor’s name, address, the amount of money owed, and proof of the debt (such as invoices, contracts, written communications).
Once DCBL has all of this information, we can start the process. Additionally, instructing us will alleviate a lot of the pressure and stress involved with these situations as we can handle the entire debt recovery process from start to finish. This includes advancing any cases over to our sister company, DCB Legal, where necessary, letting you focus on doing what you do best – your job!
These are a few of the successful debt recovery techniques that we recommend here at DCBL. Debt collection can be a stressful process but these tips can help make it a little easier.
Plus, if you’d rather leave it to the experts, then get in touch with DCBL today to start the process and get your debts recovered.