How to Recover Debts Owed to Your Company

Is your business owed money by clients or customers? We’ve created an easy list of ways to get your rightfully earned money back in your pocket! Check out our top tips below.

Call Them or Meet Them and Speak in Person

You don’t want to be on bad terms with your clients, as without them you’ve got no work. Try not to harass them at first, as they could make a legal complaint against you and your business. Keep your calls short and sweet or you could mention it at the end of a planned meeting. Make sure you have all the correct information and documents when you call or meet so there is no confusion over the facts in the situation.

Send Them Some Written Reminders

If they ignore your polite call or mentions in the meeting, you should begin to start creating and sending over written reminders. As they are sent in the post, your client may see them and understand that you are very serious about the matter and pay the best or get in contact with you about the situation. If that doesn’t work, you could include a threat of legal action if they don’t pay. However, you must follow through on the threat if you add it.

Mediation

Pay for a mediation service that can save money in the long term, however can cost a lot in the short term. Mediation is where someone acts as a conciliator between you and the client or customer. If you decide to take the situation to court, they will take you seriously as you have taken the correct steps.

Letter Before Action or LBA

This is where you get your solicitor involved and they warn the client that you are going to take them to court if they don’t pay the debt. This tends to work if customer is doing it to save money, as court could cost them more than they owe you.

Debt Collection Agency

A debt collection agency such as HJS Solutions will take your debt in exchange for a fixed fee and a percentage of the debt recovered. This is very good for businesses as this is usually the last step people have to take before getting their money back.

Court Action

If you claim in court, it will most likely be taken to small claims court. The client will most likely get their solicitor involved if they are still yet to pay. A judge will hear both sides of the argument and decide on the outcome of the situation. If they ignore the court summons, the decisions will be made in 28 days, most likely in your favour.

However, you may not need to go through all these stages as you will probably be on good terms with your client. If they cannot pay up front but are willing to negotiate, this puts you in a good position, as you can keep your client, get your money back and potentially get interest on top.

The post How to Recover Debts Owed to Your Company appeared first on Home Business Magazine.