Recovering Business Debt: Expectations vs Reality
Recovering business debt can be a daunting process, particularly if you have never been in a position where you have had to use a debt recovery partner.
This is completely understandable. Having outstanding invoices and difficult late payers is tough and it can leave businesses feeling vulnerable with nowhere to turn to.
Businesses do not need to face late payers and try to recover debts alone. Using a commercial debt recovery partner to give you a helping hand and support to collect the money you are owed is the quickest and most efficient way to recover business debt.
However, we have seen businesses have expectations of using debt recovery that are not true. In this article we will explain some of the more common misconceptions businesses have about using a debt recovery partner and how things really are.
Business debt recovery in the UK
The current state of late payments and outstanding invoices for UK SMEs is appalling. According to research by Tide UK SMEs are owed around £50 billion in late payments, with the average small business being owed £8,500.
What is worse, the average business is spending 90 minutes every day chasing late payments. That is almost 400 hours every year of lost productivity!
With these shocking figures it might seem like a no brainer to get some help recovering these debts and save time in the process. We see businesses who have never used a commercial debt recovery partner before being apprehensive when they first contact us to discuss a debt as their expectations are far from the truth.
Commercial debt recovery myths
Damaging your reputation
One of the biggest misrepresentations of debt recovery we see is businesses thinking that a debt recovery partner will damage their brand. Using a debt recovery partner can be quite taboo for a lot of businesses and they do not want it to be well known that they need help recovering outstanding invoices as it could be seen as a sign of weakness.
We would argue that this should not be the case. Wouldn’t you rather have the money that you are owed? Having your outstanding invoices paid with your business’ finances looking healthier in a much better position sounds much better than having outstanding debts worrying when or if they will ever be paid.
Having some help from the professionals should not be seen as a sign of weakness. In almost every other scenario in business you would hire or outsource the most suitable personnel for a particular task or role. Why would something as critical as the collection of cash that you are owed be any different.
Damaging your relationship with your customer
Often businesses are worried about using a debt recovery specialist because they don’t want to damage the relationship they have with their customer, particularly if they are a regular customer placing large orders.
This misconception comes from the dated perception of debt collectors, the type that use intimidation as a tactic to get their debtor to pay up. Sure, there are still some debt recovery companies like this, but our approach is completely different.
As a company we understand the importance of protecting our clients’ brand and we absolutely understand how precious client/customer relationships are, so we strive on all cases to ensure neither are damaged. We do this by maintaining a high level of professionalism and by keeping the client fully abreast of any developments throughout the case. When communicating with the debtors we are firm & direct, but we are also very understanding of their circumstances – especially during the Pandemic.
How Darcey Quigley approach recovering business debt differently
When we are instructed to collect a debt our team of credit management consultants’ action your case within just 1 hour, and work tirelessly to recover what you are owed as soon as possible.
What sets us apart is our attention to detail and constant communication with both you and your debtor. Communication is key to effective debt recovery, and you will be updated on your case progress every step of the way.
Once you have identified that you need help recovering business debt you may opt to go to a solicitor to collect what you are owed. This would be a very expensive decision, both in terms of money and time.
Using a solicitor typically means that you would be paying per hour at the hourly rate set. Here at Darcey Quigley you pay a percentage of the total debt amount and the percentage you pay is dictated by the age of the debt. Our friendly team will be able to discuss your case in more detail and advise on what fee you’ll be charged. Schedule a call here.
At Darcey Quigley we will action your case once we have agreed all costs and you will only pay these costs once we successfully recover your debt. Our cases pay out after just 16 days on average. Comparing this to a solicitor you would typically be waiting 12 to 16 days for your case to reach the courts, but there is currently even more of a delay due to the COVID-19 pandemic.
Take a look at our recent post where we explain how our debt recovery process will get you paid quicker!
Claim back compensation, interest and reasonable costs for debt recovery
UK late payment legislation has been put in place to help relieve the late payment issues small businesses are facing.
It allows businesses to legally claim back compensation, interest and reasonable costs for debt recovery on outstanding invoices.
Use our free calculator and find out exactly how much you can legally claim in just 30 seconds! If you need help collecting commercial debts or chasing late payers or even just need some free, helpful advice, call us on 01698 821 468 or schedule a call at a time that suits you here.