Using debt collection services to get your money

There are companies that provide debt collection services based locally that operate in the UK and abroad. Many debt recovery service providers will give you information on debt avoidance, as well as help to make sure your business receives payment from debtors.

There are many reasons why businesses do not receive payment from debtors. They may be individuals or businesses that have become bankrupt or insolvent. Others may have issues with poor cash flow or are themselves suffering from debt collection issues.

Debt collection agencies will charge a commission or fee for their service. Some will only charge you if they are successful in recovering your debt. The rate of a commission may be as much as 20% depending on the amount of debt being recovered. The debt collection agency should be able to provide you with the details of their rates in advance.

Always check the credentials of the debt collection agency to make sure they are legitimate and comply with the law. Ideally, you want to make sure they are licensed by the Office of Fair Trading. You can also ask them what their average debt recovered rate is. The debt collection service may include writing to those who owe you money, telephoning and making personal contact with them, and ultimately making application to a Court to have your debt paid.

It can often be expedient to begin legal action early to ensure you get your debt recovered before all assets of your debtor are sold. You should also make sure that whoever supplies your debt collection services has a history of successfully recovering debt this way.

Avoiding the use of debt collection services is still the best form of defense in ensuring your business finance is not adversely affected by debt. Make sure you make financial checks before trading with people or businesses, wherever possible, and ensure payment terms are agreed in advance. If you operate any credit accounts, then make sure that any payment default is corrected before supplying further to the person or business.

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