2nd December 2017 at 2:21 pm #568
Does anyone have any advice on getting late payers to pay on time as a freelancer?
2nd December 2017 at 2:25 pm #569
7th December 2017 at 11:17 pm #583
I’m Debbie Mynott, the Business Development Manager at a debt recovery company called The Debt Recovery Bureau.
If you’ve called the client and written to them and you’re still not getting anywhere, give me a call, and let’s see if we can help. My number is 0800 440 2359 and my email is email@example.com.
A lot of people don’t think about using a debt recovery company but if you needed an operation you’d go to a hospital and get a surgeon to do it. In the same way, actually getting paid can be a skilled job which takes a lot of time, and sometimes you’re better off coming to a professional to do it for you. We have trained staff who work in debt recovery all the time, and we have a process we work through.
If you give us a ring and have a chat, we can tell you whether we think it’s best for you to pursue this on your own, or whether you should refer it to us.
How it works
I’ll write a bit more about what we do and how it all works.
When a case is referred to us, we issue our initial letter to the customer who owes the money that day or the next. This is sent first class, recorded delivery so we can check that your customer is living at the address you have on file.
We have a process which takes about 12 weeks which includes a series of letters, which escalate in severity of message, phone calls and emails. We also undertake in-house searches on a variety of databases to gather as much information as we can about the customer. When we make contact our account managers are trained to build a relationship with the customer who owes the money. We can usually tell fairly soon if the person is a ‘can’t pay’ or a ‘won’t pay’.
Sometimes the first letter is enough to get the customer to pay up. Sometimes it takes a more work than this and it can take some time. Our standard process takes approximately 12 weeks from beginning to end.
If at the end of that time we haven’t had any success, we will review your case and a make recommendation about what we consider to be the next step.
As the money comes in we release the funds to the client on the first of the month with a report. Even if we haven’t collected any money we still send you a report so you know what’s happening. Some clients like a bit more detail and call us up and ask us to update them on their case.
We manage that – keep on top of it and keep track of it – until the debt is paid off.
How we make money
Sometimes people ask how we make money.
If you’re a business and you are owed money by another company, the company which owes you the money pays a little extra, which is our fee. This is a commercial debt. So if we recover all the money you get back 100% of the debt.
If you are business owed money by an individual not a company, or if you are an individual, you cannot add on our fees to the debt unless you have a contract with your customer which specifically says you can. This is referred to as consumer debt and our fee (15% plus VAT) comes out of any money we collect for you.
Here’s an example. Let’s say you’re a business and you come to us and you’re owed £1000.
The Late Payment of Commercial Debt Regulations 2013, which are enshrined in law, allows you to add reasonable debt recovery costs to any business-to-business debt. So that’s what we do. We charge 15% + VAT (another 3%), which we think is reasonable. In the marketplace it’s a fairly standard figure.
So presuming we recover all of your funds, you get 100% of your funds back, £1000, and we retain our fee which we collect on top: £180.
Some of the people who come to us aren’t businesses of course. We had one case where the lady was a consultant. She did some work for a company and they didn’t pay her. We successfully pursued that for her, but because she wasn’t set up as a business, our fee had to come out of the money we recovered. If you were temping, the same thing would probably apply.
We work across the UK and Ireland, and can undertake the collection of large debts overseas.
The best testament to the way we work is the fact that there was someone who we first met as a debtor who then came back to us as a client when they were owed money because we had successfully got money from him when he was a debtor. They realised we’ll get the money back for the client if at all possible.
- This reply was modified 2 years ago by Debbie Mynott.
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