I am part of the debt recovery team at Roythornes. Outside of work, I play bowls at a competitive level and have been fortunate to win national and international titles -including the national singles in 2016, world mixed pairs in 2017 and a gold medal at the 2024 European Championships.
Bowls takes a lot of skill, dedication, accuracy and teamwork to come out on top and in many respects, debt recovery is no different. For example, I use the skills acquired in playing bowls, in trying to read the game and calculate our opponents next move and deciding how to respond. It might not always pay off, but we always try to be one step ahead of our opposition and evaluate the risks.
Knowing your customer
Information is key when it comes to debt recovery. While you never take on work for a new customer expecting them not to pay, it is vital that you know your customer and exactly who your customer is before providing goods or services.
Even when you feel under pressure deliver quickly, to protect your position, you should always ask your customer to complete a credit application form or account opening form before you start work.
Check whether the customer is a sole trader, or a limited company, and request evidence of their legal status/entity.
When you have obtained this information, you can assess any potential risks and run a credit check which will help establish the customer’s ability to pay. If a credit check reveals that the customer is high risk, we are not suggesting that you shouldn’t work for them, but it would be beneficial to request payment on account before starting the work. Even if you have been working for a business for several years, you may find it beneficial to pick up the phone for a quick chat to establish whether their details remain accurate and continue to build on that customer relationship.
Personal guarantees
When dealing with a commercial customer, consider asking them to give a personal guarantee. A limited company can quickly go into liquidation, so a guarantee could give you some extra security when chasing payment. If you are in a position where you are looking to obtain a personal guarantee, seek professional advice to ensure that it is enforceable. We have a team that specialises in this.
If you do have any unpaid fees, the information that you will have obtained from the outset will help us advise on your prospects of success. There may be little point in incurring costs and potentially throwing good money after bad if your customer has a lack of ability to pay. Although we always aim to recover every debt owed to our clients, this isn’t always possible if a company has closed or has a lack of significant assets that can be used as leverage to pay the debt. This is why we work closely with our clients - to stay one step ahead of your debtors and maximise the chances of debt recovery.
Our debt recovery structure at Roythornes is cost effective, with demand letters starting from as little as £10 plus VAT. We also handle matters from pre-action protocol, all the way through to obtaining judgment. The real skill is being able to turn that judgment into cash for our clients.
Enforcement
Enforcement is often needed to provoke a customer to pay but knowledge about your customer will help us consider which method is most appropriate. We recommend that you use the following prompts when taking on a customer/opening a credit account in order to protect yourselves in the long run, as it maximises the options we have to pursue them if they turn into bad payers.
- Does your customer own their property?
- Do they drive and potentially own a car that’s free from finance?
- Do you have their bank details?
- Are they currently employed?
Timing and accuracy are key. While we use resources like the Land Registry and other databases to locate debtors, nothing replaces knowing your customer from the start.
This is a very brief overview of debt recovery yet, as you can see, like bowls, it takes a significant amount of expertise, accuracy and teamwork, the same qualities I rely on both on and off the green!
If you require any debt recovery advice, please do not hesitate to contact a member of our specialist team.