Collecting debts really can be tricky, especially when you are a small business. Although you might not want to create an awkward atmosphere with a customer, there will still be only one thing on your mind – getting your money back.
Small businesses can often feel vulnerable as bad debt can mean the difference between profitability and net losses. If you are debt collecting, the good news is that there are a number of simple steps you can take to ensure the best outcome for everyone involved.
Placing Due Dates on Bills
Keeping in Contact
Things to Remember
Taking Further Action
If you have tried to communicate with the debtor but are still not getting anywhere, it may be time to start thinking about other options.
Using a Mediation Service
Mediation is often used as an alternative as it is less costly than hiring a solicitor. With this service, an impartial person trained in dealing with situations like these, steps in and mediates between you and the debtor.
This step can be taken as part of a small claims court and can be useful in reaching a settlement. The cost of a professional mediator needs to be split between you and the debtor.
Taking Court Action
This is often something that occurs if mediation has not worked. You can make a court claim for your money or make a claim online if the money owed is less that £100,000 and owed by no more than 2 people or 2 organisations.
Making Statutory demands
An official demand can be used to ask for money you are owed. If the customer or business that owes you money chooses to ignore the statutory demand or can’t repay the money, you can apply to court to take further action. You can either apply to bankrupt someone if you are owed £750 or more by an individual or get a company liquidated if you and any other creditors are owed £750 or more.
For more information about your options, visit Gov.uk.