How Your Business Can Reduce the Cost of Collecting Late Payments
It has been well documented in recent months that there has been a substantial increase in late payments to small businesses in the UK. Late payments not only affect the cash flow health of a business but they also are costing small businesses over £6.7 billion a year, up from £2.6 billion in 2017 – just to collect money they’re already owed.
This latest research from the people behind Direct Debit and Bacs Direct Credit, shows that the cost of recovering overdue money is now at an average of £9,000 for each business. We take a look at ways this cost can be brought down by partnering with a debt recovery firm like ourselves.
Reduce staff time spent trying to recover late payments
43% of SMEs spend around £4.4 billion in admin costs alone, chasing late payments. Time and money is even more vital in smaller businesses, so by outsourcing the recovery process to an experienced debt recovery firm you and your team’s valuable time can be spent growing your business while we help boost your cash flow by pursuing late payments.
Avoid borrowing money to cover shortfalls
Over a third (34%) of SME business owners experiencing late payments say they have to rely on overdrafts or loans to help them meet their monthly obligations. This means in addition to all the other costs involved when recovering late payments, owners are also having to foot the bill for the interest incurred when borrowing money through overdrafts or loans.
When businesses partner with debt collection firms the unpaid sums are recouped quicker as there is an experienced, knowledgeable team on the case with the sole aim of recovering late payments. This ensure that any interest incurred is for a shorter period of time or it can even allow business owners to meet their monthly obligations without the use of overdrafts or loans.
Create an environment where late payments are not acceptable
By having a solid credit control process in place you are helping your clients understand that late payments are not tolerated by your business.
See our post on how to build your credit control process
When the initial steps of the process fail to recoup unpaid sums it is then time to send a letter to your client to state that a debt collection agency will be instructed if the debt remains unpaid. This step is vital when recovering unpaid debt as it not only displays the seriousness of the matter but allows your client to see that further action will be taken should they continue to choose not to pay. If this warning is unsuccessful you will then have an experienced recovery team on board to handle the issue going forward.
Our clients have reported that partnering with AMA has reduced long term debt issues and has helped stop any late payment issues from reoccurring.
We’ve gained in-depth knowledge of debt collection from our 60 years of trading. This expertise has allowed us to tailor our services to ensure our clients improve their cash flow by working with us. Our operations include:
- Working on a no collection, no commission basis
- Using the most cost-effective tracing systems to locate debtors
- Working alongside market leading solicitors
- Offering a comprehensive pre court service and profiling of cases to avoid unnecessary court action and any unnecessary costs
- Weekly bank remittances to ensure our clients’ money reaches them as soon as possible
- Real time reporting available to clients 24/7
- Offering a tailored approach, when required, when dealing with a client’s debtor to avoid any loss of business from the debtor in future. We have a wealth of experience working with clients to achieve their preferred business relationship outcome.
- Our efficient processes alongside the knowledge of our experienced team ensure our SME clients save both time and money by allowing us to recover their money quicker.