FAQ (Frequently Asked Questions)
Should I chose a debt collection
agency or a solicitor?
Going to court is the last resort. Solicitors get paid
by the hour and will probably turn out to be far more
expensive, whereas an agency will only take a commission
of the debt they collect, which in most cases is the
cheapest option.
What does it cost?
Rule of thumb: calculate with a 4% to 8% fee for the
recovered debt (note: it can be more, it can be less…).
Foreign debt collections are 2 to 3 times as much. If
the collection agency fails to collect you should not
have to pay anything, except where a placement fee is
applicable.
How high is the chance my bad debts will
be paid by using a collection agency?
It is really difficult to answer this question, although
the majority of companies will pay quite quickly as
soon as they have realised a third party is now involved.
Make sure you only have to pay after successful collection.
How quickly will I receive the money?
Ranges from within one day to a few weeks. Going to
court is generally the only option if the debt is not
collected between 6 to 8 weeks. You receive your money
less fees immediately after collection of the debt by
the collection agency
What is credit insurance, or trade indemnity?
Insurance in case your customer fails to pay the invoice.
You receive payments for your bad debts up to pre-determined
limits.
What information is needed to collect an
individual invoice?
Full name and address, telephone and fax numbers of
the debtor, amount outstanding, copies of invoices,
statements, relevant correspondence, collection attempt
history (many agencies allow you to submit this information
online).
How are invoices usually collected?
A combination of letters, faxes and telephone calls,
the latter being the most effective. Going to court
is the last resort, and hopefully if the previous methods
work it will not get that far.
What is factoring?
A service providing you cash upon issuing invoices and
sales ledger and collection services. Please visit our
factoring website by clicking HERE
if you require further information.
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Debt
Recovery Guide
