Boosting Your Debt Recovery Success Rate: A Simple 5 Step Process
If you’re running a business that extends credit to your customers, you’re likely familiar with the challenges of debt recovery.
While extending credit can be an excellent way to build long-term relationships with your customers, there will always be cases where customers are unable or unwilling to pay their debts.
If you’ve experienced this you’ll understand how frustrating it can be, whilst also being very worrying.
The late payment problem is only getting worse with 51% of businesses experiencing late payment in 2022.
In these cases, it’s crucial to have a debt recovery strategy in place that can help you recoup as much of your losses as possible.
Fortunately, there are several strategies you can use to boost your debt recovery success rate!
In this article, we’ll explore some of the most effective techniques for recovering debts and reducing the overall impact of bad debts on your business that will see your debt recovery success rate soar!
Establishing clear payment terms and policies will boost your debt recovery success rate
One of the most effective ways to reduce the risk of bad debts is to establish clear payment terms and policies from the outset.
Ensure that your payment terms are easy to understand and that your customers are aware of their responsibilities when it comes to paying their debts.
You should also be clear about any fees or penalties that will apply if payment is late or not made at all.
Did you know you can claim late payment interest, compensation and debt recovery costs on your overdue invoices thanks to The Late Payment of Commercial Debts Act.
The addition of these late fees gives extra incentive for your client to pay you quickly!
Use our free calculator to find out exactly how much you’re entitled to claim.
Act promptly and professionally
If a customer falls behind on their payments, it’s essential to act quickly and professionally.
Make sure that you follow up promptly and consistently with the customer to remind them of their debt and the consequences of not paying. Ensure that your communication is always polite and professional, as aggressive or confrontational tactics can often backfire.
Consider using a debt recovery agency with a great debt recovery success rate
If you’re struggling to recover a debt, it may be worth considering using a debt recovery agency.
These agencies specialise in recovering bad debts and have the expertise and resources to pursue debts more aggressively than you might be able to on your own.
While using a debt recovery agency will typically involve paying a fee, the cost may be worth it if they can help you recover a significant debt.
Find out how our process ensures businesses are paid 5x quicker than using a solicitor!
Here at Darcey Quigley & Co we have a successful debt recovery rate of 93%!
Offer payment plans or discounts
In some cases, a customer may genuinely be struggling to pay their debt. If this is the case, you may be able to recover more of the debt by offering a payment plan or a discount in exchange for prompt payment.
While this approach may not be appropriate in all cases, it can be an effective way to recoup some of your losses and maintain a positive relationship with the customer.
Keep accurate records and documentation
Finally, it’s crucial to keep accurate records and documentation of all communications and actions related to debt recovery. This documentation can be essential if you need to take legal action to recover a debt, and it can also help you to track the effectiveness of your debt recovery strategies over time.
Take action before it’s too late
In conclusion, debt recovery can be a challenging and time-consuming process, but there are several strategies you can use to boost your debt recovery success rate.
By establishing clear payment terms and policies, acting promptly and professionally, considering using a debt recovery agency, offering payment plans or discounts, and keeping accurate records, you can maximise your chances of recovering bad debts and minimising the impact on your business.
Struggling with your debt recovery success rate?
If you’re struggling with your debt recovery success rate it’s time to seek the help you need to collect what you’re owed.
Here at Darcey Quigley & Co we’ve been recovering commercial debts from all over the world for the past 16 years.
Our tried and tested process ensures you are paid quickly without sacrificing the relationship you have with your client.
- We operate on a no win, no fee basis.
- Cases actioned within 1 hour with 48 hour turnaround.
- 93% success rate recovering overdue invoices.
- Fees starting from just 3%.
- Recover late payment interest and compensation on your behalf with an 89% success rate recovering additional charges.
- UK & International coverage.
- Rated 5 Stars on Trustpilot.
If you have questions about a business debt schedule a call with one of our commercial debt specialists here or phone 01698 821 468.
Meet our credit management and commercial debt recovery content writer, Declan!
With a keen eye for detail and a passion for educating others, Declan is committed to creating informative and engaging content that empowers readers to get a firner grasp of their credit control to improve their cashflow.
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