The late payment of invoices is an increasing problem for UK businesses because it can cause issues with cash flow.
Cash flow problems continue to be one of the biggest causes for business failure within the UK. According to the Government’s accredited official statistics, one in 186 companies on the Companies House register entered insolvency between 1 November 2023 and 31 October 2024.
It is, therefore, vital that businesses collect the debts owed to them as soon as possible.
However, the collection and enforcement of debts is fraught with potential pitfalls.
Top Tips for Debt Recovery
- Act quickly
- Engage with the debtor to identify any issues around the invoice
- Consider the value of the relationship with the debtor and future prospects
- If there are temporary debt issues, consider a repayment plan to secure payment
- Instruct solicitors as soon as possible to advise you on the most suitable course of action and options available to you to recover the debt.
Why use a Solicitor to chase your debtors?
Many businesses avoid engaging a solicitor to chase book debts and overdue invoices because they do not want to get dragged into a costly legal dispute but involving a solicitor as early as possible, is likely to result in more effective and successful recovery of debts.
That is because solicitors, once appraised with the facts and evidence, will be able to identify the best course of action for you to pursue. They know exactly what information they need to include in the demand; how much time to allow for a response; and when to stop throwing good money after bad.
They can act quickly to protect your position. Often a letter from a solicitor will be taken more seriously by a debtor and prompt a response and/or offer of payment, than a demand from your accounts or debt recovery department.
A solicitor will ensure you have complied with the legal formalities set out by the Civil Procedure Rules 1998 and will work with you to provide specific advice and know-how to ensure you have the best prospect of recovering the debt.
A solicitor can negotiate on your behalf to settle disputes in a cost effective and timely manner and often without the need to issue proceedings.
Every case is different, but instructing a solicitor to draft and send a formal letter is an affordable option that could save you valuable time and effort.
Our debt recovery scheme
At Palmers Solicitors, we offer a cost-effective Debt Recovery Scheme to enable you to benefit from the involvement of legal experts without breaking the bank.
We can draft a formal letter to your debtor to ensure compliance with any relevant Practice Direction.
If necessary, and subject to the response from the debtor, we can proceed to the next step and issue legal proceedings to help you recover your debt – all for a fixed, affordable fee.
Our expert solicitors can advise you on all aspects of commercial debt litigation. Get in touch to find out more about our Debt Recovery Scheme.