Are my Debtors suitable for Debt Recovery?
I am owed money for works performed by you but should I refer them to a Debt Collection Agency for collection?
Here are some of the key indicators when deciding whether or not to engage a debt Collection Agency:
- The debt is outside your trading terms or due date on the invoice
- There is no dispute as to the money owing or no counterclaim for faulty workmanship
- The debtor is simply stalling you or refusing to respond to requests for payment
- You have quoted and charged as per the quotation and re-quoted for any variations
- You have a signed contract/agreement
- You have current contact details of the debtor
- You have a clear copy of the invoice and any quote/agreement/contract
You will best be able to recover your debt swiftly when there is no dispute and the debtor is just ignoring or stalling you. Remember, the longer you wait, the more difficult it may be to recover your money!!
Where there is a dispute, debtors will often refuse to pay any amount to you until the dispute is resolved. Disputes may be in relation to poor workmanship requiring rectification, incomplete works, overcharging or even failure to comply with completion dates. In these cases, you must be commercial and be prepared to negotiate a settlement or sometimes re-attend the job to make good any defects etc.
With any debt collection action, your best weapon is for the Collection Agent to threaten legal action if a debt is not paid. This threat will have no strength if there is a genuine dispute that is not taken into consideration during the collection process, and if legal action is taken by you, there may be substantial legal costs or at best you may have your net return reduced heavily by those costs.
