With reports of SME’s expecting their revenues to decrease by 50% or more in the coming months, the light at the end of the tunnel may be fading for some.
Some ‘experts’ are predicting a gloomy outlook but many Business owners are focused on navigating their way through the challenge that the Coronavirus pandemic has presented.
One of the biggest challenges that most SME’s will face is getting back in control of their cash flow and revenues. This is not just a challenge for a few Companies, it will be a challenge for most.
It was reported by Insolvency Firm that 509,000 UK Businesses were already facing financial distress in the first 3 months of 2020. That figure is expected to have dramatically risen given recent events due to Covid-19.
Taking immediate and optimal action is required to remedy cash flow issues. Some Business Experts say now is the time for Companies to swiftly act on recovering unpaid debts from customers.
Unfortunately, a growing number of opportunists have sough to benefit from the uncertainty that Covid-19 has caused. There understandably has been a sharp rise in Unpaid Invoices and account fees.
Depending on the size of your Business and its respective niche – it is best to quickly resolve overdue accounts before matters spiral out of control.
Types of Debt Collection in the UK
Primarily there are two types of Debt Collection sectors in the UK. These can be broken down further but typically these are the main 3:
Consumer & Private Debt
This is the type of debt that typically is owed from an individual. Normally when somebody is contracted to a service, credit agreement or purchase of goods. These types of debts often fall under the remit of the Financial Conduct Authority if the individual has signed a consumer credit agreement.
Private Debts tend to be more owed from individuals to SME’s or Sole Traders. They can even be Peer to Peer but still need to be dealt with lawfully and compliantly.
Commercial and Business Debts are formed by Business to Business dealings and contracts. They can also be referred to as Corporate or B2B Debts. Whilst not regulated by the FCA, all Business Debt Collection actions must be conducted in a lawful manner. There are regulations governing unpaid business debts such as the Late Payment of Commercial Debts Act.
Using a Debt Collection Agency
Choosing a Debt Collection Agency to partner your Business is a step that should not be taken lightly. As with any industry, there are the good, the bad and the downright ugly.
You will want to work with a Professional and accredited Debt Collection Agency. This ensures that you will receive a quality service. Any Agency you work with should be members of the Credit Services Association, be a Limited company with years of experience and have a solid reputation. Google is obviously the best resource for applying due diligence when doing your research.
You do not want to work with overly aggressive Agencies that can potentially damage your brand, good standing or reputation.
A Debt Collection Agency will act as an ambassador for your Company so it is essential your source the best solution. You would not just employ anybody to work for your Business without checking their CV and qualifications. It should be the same basic business practice when it comes to recruiting a Debt Collection Agency to work with.
Notable UK Debt Collection Agencies
The Debt Collection industry is awash with Companies pertaining to be the next best thing. Great promises but talk is cheap and cheap is not cheerful. It is always recommended you do your research but here are two different Leading solutions to get you on your way.
Federal Management is an Award-Winning FCA Regulated Company that provides a full 360-degree debt collection service. Their Low Fixed Fee service encompasses legal action and enforcement also. They are a Nationwide company and have collected debts on behalf of some of the biggest names in the UK. As well as high level specialism, they cater for Small and Local SME’s across the country. The ‘Manchester United’ of the Debt Recovery Industry without a doubt.
Frontline Collections are a famous name within Consumer oriented services across the UK. From Dental Debts to Private School Debts, their highly revered Debt Collection services are the first point of call for thousands of public serving companies.
Every enquiry is given a full Free case assessment of the chances of recovery. Very transparent in terms of cost and has 15+ years success in Nationwide collection services.
Should I act Post Covid-19?
The answer is short is No. That is what most that will do. Taking expedient action now will prevent any further financial disruption. If you or your Business are owed money then the time is now. It will pay to be pragmatic about unpaid debts. Or you could just wait and risk being at the back of the payment queue.