A Complete Guide to Debt Collection

It is common for both businesses of every size and private individuals to be owed money in the UK.

The reasons for this are varied, but can always cause problems for the person that is owed money.

Maintaining a stable cash flow is extremely important, especially for businesses. If someone that owes you money puts this at risk, it may prevent you from carrying out your financial obligations.

Over 80% of businesses in the UK are owed money, with some owners needing to take drastic measures to keep their company afloat. Unfortunately, many had to close down entirely due to a lack of money from unpaid invoices.

When a person or a business is owed money, it is important to understand what course of action to take. No debt should be ignored, as this will only invite more problems.

Luckily, there are many debt recovery options available to those that are in need. Understanding what course of action to take is important, as is the type of debt that you are owed.

Types of Debt

As with any service-based sector, there are many different types of debt that specialists provide solutions for. Understanding what these types are can be helpful when searching for a solution.

Commercial Debt

Most debt’s involving a company that is owed money are classed as commercial debt. There are many reasons as to why these may occur, but the most common example is when a customer or client has not paid for goods or services.

It is standard practice for businesses to issue invoices when dealing with other company’s. Often, there is a 30-60 day period that the customer has to pay their invoice amount. If this does not happen, the invoice is classed as overdue and debt is created.

Depending on the size of the company, they can perform basic debt recovery tasks. These normally involve chasing the client for payment. If this is not successful, then it is better to seek out a specialised commercial debt collection solution.

There are many specialist solutions available, and business owners should consider their options carefully. For example, court action is commonly at the forefront of people’s minds when it comes to the subject of recovering a debt.

Whilst this is a perfectly viable option, the cost incurred can often be very high. Worse still, this cost may force some companies to write the debt off completely.

Instead, many companies are choosing to instruct UK debt collection agencies, as they provide an effective service at a lower cost.

Private Debt

It is common for people to create private financial agreements with friends or family members. For instance, they may loan money to a friend to help them during a difficult time. Unfortunately, these people often do not get repaid, and as such a private debt occurs.

Another cause of a private debt might be for a self-employed person that has not been paid for their work. Regardless of the cause, one common concern people have with private debts is that they will not be able to get their money back.

Fortunately, there are many specialist solutions for private debt collection. When searching for one, it is useful to have a source of trusted suppliers. Sites such as debt collection London provide a free service that helps people to find a solution for all private debts.

International Debt

Thanks to global telecommunications and the internet, it has never been easier for both companies and private individuals to deal with other people all over the world. International transactions happen millions of times every day. Unfortunately, this increases the likelihood that someone will eventually not pay, and so an international debt can very easily happen.

Many debtors believe that they can withhold payment with little or no consequences simply because they reside in another country to where they owe their debt. This is simply not true, and to a specialist, an international debt collection is a routine task.

In the UK, Federal Management is regarded as the leader for international debt collection. They have a global network of trusted partners. Each one is an expert at recovering debt in their nation, and as such, provide the ability to recover debt from anywhere in the world.

As with dealing with a new customer in your own country, if you can provide your services on a global scale, it is important to perform all due diligence before committing time and money. If you are in a situation where you are owed money from someone overseas, seeking out a professional may be a good option.

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