By Julie Parr, Director of Business Improvement at Muckle LLP.
DIY debt recovery can be a frustrating time sap that doesn’t always get the results you need. So, is it time to make calling in the professionals, policy?
There can’t be many business owners who are immune to the strain of unpaid invoices. Incredibly, research suggests that approximately 70% of all invoices are not paid on time. More than a mere inconvenience, unpaid invoices can threaten the very existence of the company you’ve worked so hard to build.
With the COVID-19 pandemic compounding cash flow concerns and some commentators predicting a ‘debt tsunami’, now is a good time to review your whole approach when it comes to getting paid and what to do when you’re not.
Julie Parr, Director of Business Improvement at Muckle LLP, shares some of the things well worth thinking about as part of your debt strategy.
Do you need professional help?
It can be tempting to just do it yourself, rather than calling on the experts.
But as Julie explains, this can sometimes be a false economy: “We often hear from clients that they think about professional debt recovery as a last resort, but getting professional help has many advantages whether you’re looking to recover one debt or thousands.
“The simple fact is that businesses often find that a letter from a solicitor seeking payment produces better results more quickly than their own attempts at recovery”
So what are the benefits of seeking professional debt recovery support?
Save time
Chasing debts takes time and effort and this can put a strain on your business as you’re distracted elsewhere. Call in the professionals and you can focus on what matters most – running your business.
In a recent client example, we were instructed to collect a debt of £2,898, we added £70 compensation (the extra payment goes towards the costs of the inconvenience this has caused your business) and late payment interest of £111.85 (it is your statutory right to charge this for B2B debts).
We collected and sent to our client £3079.85 – our charges were £50 + VAT.
Save money
Trying to recover your own debts takes time, and success isn’t always guaranteed.
More often than not, interest or compensation for late payments under your terms will cover the costs for professional debt recovery services.
If your terms don’t cover this, under the Late Payment of Commercial Debts (Interest) Act, businesses have the right to charge their customers compensation and statutory interest on any overdue invoice to help cover the recovery costs.
Maintain good client relationships
One of the benefits of taking on professional help is that it makes someone else responsible. Muckle would be communicating with the debtor and chasing payment. This means that you can focus on preserving the business relationship with your client which we understand is crucial to your business. This is why we chase the debt using data led commercial approach which does not start with a typical “legal” letter.
So, when should you get professional help?
When it comes to deciding who is best placed to help with your debt recovery efforts, Julie is keen to stress the benefits of calling on an experienced law firm. “At Muckle, we can call on a variety of legal expertise that just isn’t available to credit agencies, helping us get better results for our clients.”
Julie believes the best way to approach incorporating professional debt recovery into your business is to simply make it policy: “State clearly in your internal policy that a customers failure to make payment will result in it being passed over to a debt recovery service. You’ll find you spend less time deciding what to do and continually chasing.
“Customers tend to understand that ‘rules are rules’, which can take some of the heat out of a difficult situation.”
Debt recovery made easy with Muckle Collect.
Muckle has been helping businesses get paid for over 30 years, the team have now developed a new state-of-the-art debt recovery tool, Muckle Collect, that lets you submit and manage your outstanding debts online – anytime and anywhere.
Best of all, with fixed cost and ‘no recovery, no fee options’ available, you have the reassurance that comes with a total upfront transparency on fees.
So, when it comes to debt recovery, why not make it policy and let Muckle collect? The results may surprise you.
How does it work?
Muckle Collect has been developed by our in-house multidisciplinary team, made up of legal professionals, finance, data analysts, and tech professionals, and it allows you to:
• Submit cases anytime, anywhere in as little as 6 easy steps.
• Upload all the debtor information directly.
• Send us a single case, or bulk upload multiple collection cases in one go.
• Choose your fee structure there and then.
• Monitor your cases from start to finish.
This is all backed up by an experienced team who will take the time to understand your cases fully and recommend the best debt recovery strategies for you.
To find out more about Muckle Collect, click here, call us on 0191 211 7889, or email collect@muckle-llp.com
What our clients say about Muckle Collect:
“That must be a speed record! He ignores us for 4 months and pays in 90 minutes once you’re involved!”
NBS Enterprises Limited
To find out more about Muckle LLP’s debt recovery services and Muckle Collect, call 0191 211 7889 or e-mail us at collect@muckle-llp.com.