Scott & Mears Credit Services Limited

In the world of business, prevention is almost always better than cure, especially when it comes to unpaid invoices. While recovering debt is essential, avoiding bad debt altogether can save your business time, stress, and money.

One of the most effective ways to reduce your risk is by thoroughly vetting new clients before you extend credit or enter into long-term agreements. In this post, we’ll walk you through practical, actionable steps to help you make better-informed decisions.

Conduct Credit Checks

Before you do business with a new client, particularly if you’re offering credit terms, it’s wise to run a commercial credit check. This will give you an overview of:

• Their credit score
• Payment history
• County Court Judgments (CCJs)
• Insolvency records

Use Strong Terms & Conditions

Your terms and conditions should clearly outline:

• Payment terms (e.g., “14 days from invoice date”)
• Late payment charges
• Your right to suspend services or charge interest
• Ownership of goods (in case of physical product sales)

Tip: Make sure the client signs these before you begin work. That signature can save you in court if things go south.

Get a Signed Credit Agreement

If you’re offering a credit facility, treat it like a loan. Ask clients to fill out a formal credit application form, including company registration details, directors’ information, and bank references.

For added protection: Consider a personal guarantee from the directors for limited companies.

Check Their Company Status

Search the company on Companies House. Look for:

• Filing history and overdue accounts
• Company directors
• Recently dissolved or phoenix companies
• Frequent name changes

Red flags here could indicate financial instability or attempts to avoid creditors.

Set Internal Credit Limited

Just because a client passed your checks doesn’t mean you should offer unlimited credit. Set internal credit limits for all clients, especially new ones, and review them regularly based on payment behaviour.

Start small and increase limits only once trust is built.

Watch for Early Warning Signs

Even after onboarding, stay alert to changes in client behaviour. Warning signs include:

• Delayed payments or frequent excuses
• Requests to change payment terms
• Difficulty getting hold of decision-makers
• Staff turnover in finance departments

These may be early indicators of cash flow issues and a sign to tighten credit controls.

To Conclude

Taking on new clients is exciting, but protecting your cash flow must remain a priority. By putting a solid vetting process in place, you reduce your exposure to bad debt and strengthen the financial health of your business.

Need help with your credit control or debt recovery? Our team offers tailored solutions that start at the first sign of risk, not just when debts go overdue. Get in touch to learn more.

CLICK HERE to submit your debt to us today

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 21/07/25

When outstanding invoices pile up, the effort to recover them can drain your business’s resources, time, and focus. Partnering with a professional debt collection agency liberates you to concentrate on core business activities: attracting new customers, driving growth, and safeguarding your profits.

Why Professional Debt Collection Makes a Difference

1. Specialised Knowledge and Proven Strategies

Navigating the complexities of debt recovery demands specific expertise. Most business owners lack the time or background to effectively pursue overdue payments. A professional debt collection agency brings a wealth of industry-specific knowledge, understanding the legal and procedural nuances required for efficient and compliant debt recovery. They know precisely what methods work and, just as crucially, what doesn’t.

2. Results-Oriented Performance

The majority of reputable debt collection agencies operate on a “no win, no fee” or commission-based structure. This model inherently motivates them to secure prompt and successful payments, as their earnings are directly tied to the results they deliver. It’s a mutually beneficial arrangement: your business recovers what it’s owed, and the agency is rewarded for its effectiveness.

3. Expert Guidance and Continuous Support

Debt recovery extends beyond simple phone calls and emails. Some situations escalate to legal action. An experienced debt recovery firm will not only manage all communication and administrative tasks on your behalf but also provide strategic advice on the most effective course of action. This reduces your stress and instils confidence that your case is being handled with the utmost professionalism.

4. Thorough Documentation and Legal Preparedness

Every action taken throughout the debt recovery process is meticulously documented. Should your case require legal escalation, this comprehensive trail of evidence proves invaluable. It not only strengthens your position in court but also ensures compliance with tax regulations when claiming bad debt relief.

5. Reduced Outstanding Debt

When a professional debt collector contacts a debtor, the likelihood of a swift response dramatically increases. The involvement of a third party often prompts immediate communication or payment, helping to avoid costly legal proceedings. This introduced sense of urgency frequently leads to faster settlement of outstanding accounts, significantly improving your business’s cash flow and financial stability.

Reclaim What Your Business is Owed

And there you have it – an essential list of just some of the benefits of debt collection. Whether you need expert advice, comprehensive outsourced debt collection services, or support for court proceedings, a dedicated team can guide you through every stage. They ensure your overdue invoices are handled swiftly, professionally, and in line with industry best practices.

Ready to improve your cash flow and minimise your exposure to bad debt?

CLICK HERE to submit your debt through to us.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 28/05/25

Paying Off Debt: Is Cash Still Relevant?

For generations, the saying has held strong: “Cash is king.” The tangible feel of notes in your hand, the immediate sense of ownership, the perceived security of having physical currency – these are powerful notions ingrained in our financial psyche. But in today’s rapidly evolving economic landscape, particularly from our vantage point in the debt collection industry, we have to ask: Is cash still truly king?

From where we stand, the answer is becoming increasingly nuanced, leaning more towards a “not necessarily” than a definitive “yes.” While cash undoubtedly still plays a vital role, its dominance is being challenged, and in many ways, overtaken by the digital revolution.

The Rise of the Digital Realm

We see it every day. Payments for goods and services are increasingly made through debit cards, credit cards, mobile payment apps, and online transfers. The convenience and speed of these methods are undeniable. For consumers, it’s about seamless transactions and often, the ability to track spending digitally. For businesses, it can mean reduced handling costs and faster processing.

This shift towards digital payments has a direct impact on debt collection. While cash payments still occur, they are becoming less frequent. This presents both challenges and opportunities for our industry:

• Challenges in Tracking and Verification: Cash payments, while seemingly straightforward, can be harder to track and verify compared to electronic transactions. Ensuring accurate recording and preventing disputes can be more complex.
• Opportunities for Efficiency: Digital payment methods, when available, can streamline the repayment process. Setting up direct debits or online payment portals can make it easier for individuals to manage their repayments and for us to process them efficiently.

Beyond Convenience: Factors Influencing the Decline of Cash

Several factors are contributing to the gradual decline of cash’s absolute reign:

• Technological Advancements: The proliferation of smartphones and the development of user-friendly payment apps have made digital transactions incredibly accessible.
• E-commerce Boom: Online shopping necessitates digital payment methods, further reducing the need for physical currency.
• Government Initiatives: Some governments are actively promoting digital payments for increased transparency and efficiency.
• Changing Consumer Habits: Younger generations, in particular, are growing up in a predominantly digital world and are more comfortable with cashless transactions.

Our Perspective: Adapting to the New Order

As a debt collection agency, we are constantly adapting to these evolving trends. While we still facilitate and process cash payments when necessary, we are increasingly focused on providing and encouraging digital payment options. This allows for:

• Greater Convenience for Debtors: Offering a variety of payment methods makes it easier for individuals to fulfill their obligations.
• Improved Efficiency in Processing: Digital payments reduce manual handling and the potential for errors.
• Enhanced Transparency and Record-Keeping: Electronic records provide a clear audit trail for all transactions.

Conclusion: A Shared Throne?

So, is cash still king? While it retains a certain nostalgic appeal and continues to be a viable form of payment, its absolute dominance is undoubtedly waning. The convenience, security features, and technological advancements associated with digital payments are reshaping the financial landscape.

From our perspective in debt collection, we see a future where cash and digital methods coexist, perhaps sharing the throne. Our focus remains on facilitating efficient and transparent repayment processes, adapting our strategies to meet the evolving preferences and capabilities of individuals in managing their financial obligations, regardless of their chosen payment method.

Do you have invoice which is beyond terms and you feel that you may need some assistance with?

Contact a member of our team today on 01702 466 300, or email sales@scottandmears.co.uk.

If you would like to submit your debt through to us, simply CLICK HERE.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 28/04/25

When taking on new clients, a question we regularly get asked is, “what fees can I add to the debt?”, or a variation of this question.

This blog will outline the different fees and costs that you can add to the debt, depending on the type of debt it is, and what it states in your terms and conditions.

Business-to-Business Debt

If your business has unpaid invoices which are owed by another business, costs can be added in one way or another.

Debt recovery costs can be added to the debt contractually. This is where it is stated that debt collection costs are to be added in circumstances of late payment in the signed contract you have with the customer, or in your terms and conditions. Interest can also be added to the case if it is stated in your contract/terms. The interest rate must be reasonable – this tends to be anything less than 10%, however the average tends to be between 1-2%.

If your company does not have any terms or a signed contract with the customer, then there is late payment legislation that you can fall back on. Through the Late Payment of Commercial Debts (Interest) Act 1998 companies can added three types of fees to the unpaid balance:

Collection Costs

This piece of legislation allows reasonable costs from debt recovery agencies to be added to the debt.

Interest

At a rate of 8% above the Bank of England base rate, companies can add interest to the debt as long as there is not a different rate of interest in the contract/terms.

Late Payment Charge

Commercial customers can also be charged a fixed sum for the cost of recovering a late payment on top o claiming interest from it. The amount added depends on the debt value; the fee can only be charged once per invoice. See the different fee amounts below:

                DEBT VALUE                                   WHAT CAN BE CHARGED

Up to £999.99 –                            £40

£1,000 to £9,999.99 –                   £70

£10,000 or more –                        £100

We recommend looking at the government website where it has a further breakdown on what fees can be added to a B2B debt. Follow this link.

Business-to-Consumer Debt

The rules for adding fees to B2C debts differ from B2B debts.

Debt recovery costs are not legally enforceable unless it is explicitly stated in the contract with the customer or in the company’s terms. That being said, even if it is not stated in your terms, costs can be added to the debt balance however the debtor is not obliged to pay them if they refuse. It is therefore recommended that a clause is added in your terms/contract which explicitly states that debt recovery costs are payable by the debtor in circumstances of late payment.

Like B2B debts, a reasonable interest rate can also be added into the terms/contract and put on top of the debt balance in instances of late payment. For B2C debts, it must be highlighted in the terms/contract as there is no legislation for to fall back on.

Hopefully this article has been useful in knowing what your options are in adding costs to your debt balance. If you have any questions or queries, and are in need of some debt recovery assistance, please do not hesitate to contact our offices on 01702 466 300, or email sales@scottandmears.co.uk.

If you would like to submit your debt through to us, simply CLICK HERE.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 28/03/25

Collecting outstanding payments can be a persistent challenge for businesses. Despite implementing various systems and procedures, some clients inevitably pay late, placing businesses in the uncomfortable position of having to pursue them for owed funds. Many business owners find this aspect of running a business difficult to manage. These conversations can be awkward and carry the risk of damaging client relationships, especially with habitually late payers or when substantial sums are involved. Is it better to simply forgo chasing the debt altogether?

The Impact of Pursuing Outstanding Payments

One primary benefit of pursuing a debt is the increased likelihood of receiving payment. This action signals to the client that payment is overdue and requires their attention. If direct communication feels uncomfortable, consider engaging a debt collection agency. These agencies specialise in recovering outstanding payments, allowing business owners to focus on their core operations while preserving professional relationships.

The Risks of Not Pursuing Outstanding Payments

Conversely, choosing not to pursue outstanding payments can have significant repercussions. The most obvious is the potential loss of revenue for completed work or delivered goods. This directly impacts cash flow and can lead to financial strain. Furthermore, a lax approach to debt collection can negatively affect a business’s reputation. While maintaining positive client relationships is important, so is demonstrating professionalism and financial responsibility. If it becomes known that a business is lenient with overdue payments, it could attract fewer desirable clients or even encourage opportunistic behaviour from others. Therefore, failing to pursue debts poses a greater risk than actively seeking payment.

Effective Strategies for Collecting Outstanding Payments

• Directly Request Payment: Often, late payments are unintentional, resulting from administrative oversights, banking issues, or misplaced invoices. A polite reminder shortly before the due date can be a helpful preventative measure. If payment remains outstanding, initiate the collection process.
• Automate Payment Reminders: Automated reminders offer a less personal approach to debt collection. Many accounting software solutions provide this feature, sending automated notifications about upcoming and overdue invoices. This protects both the business owner and the client from potentially awkward conversations and ensures timely follow-up.
• Reference Agreed-Upon Terms: Clearly referencing the original contract terms and conditions, including payment schedules, reinforces the client’s contractual obligation to pay. This can be particularly effective when addressing disputed invoices or payment delays.
• Strategic Timing: Understanding a client’s payment cycles can improve the effectiveness of collection efforts. Many businesses process payments weekly. Identifying these payment runs and sending reminders shortly beforehand can increase the chances of prompt payment.
• Provide Necessary Information: When requesting payment, ensure the client has all the necessary information to facilitate payment. Include the overdue invoice, payment methods, and any relevant links to online payment portals. Simplifying the payment process can encourage prompt action.

Scott & Mears Credit Services can help. Our experienced team handles all aspects of debt recovery, from initial payment chasing to any necessary legal action. Contact us today to learn more about how we can assist your company in recovering money that is owed to you.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 24/02/25

Since the pandemic, the transition to remote work has redefined many conventional practices, including debt recovery. As face-to-face interactions have become less of the norm, agencies are increasingly relying on digital tools. This shift has compelled the industry to innovate and stay effective in a changing environment.

While automation has streamlined many aspects of debt recovery, maintaining a personal connection remains vital. Achieving a balance between technological efficiency and human interaction is essential for success. Automation can handle tasks like reminders and notifications, but seasoned professionals are indispensable for managing disputes and sensitive cases.

Challenges of Remote Debt Recovery

With change comes challenges, for example:

• Cybersecurity Concerns
  • Managing sensitive financial data remotely introduces heightened risks. Agencies must prioritise robust data protection measures to comply with GDPR and safeguard debtor information.
• Adapting to Regulations
  • UK debt recovery is governed by strict and evolving laws requiring fair treatment of debtors. Remote workflows can complicate compliance efforts, especially with automated systems in play.

Positives of Remote Debt Recovery

But what positives could come from the digital era in the debt recovery space?

• Online Dispute Resolution
  • The rise of Online Dispute Resolution offers a faster, more convenient way to handle disputes. By integrating Online Dispute Resolution platforms into operations, it helps agencies resolve issues more quickly and maintain fairness throughout the process; in turn improving debtor relationships.
• Specified Solutions
  • Does your debtor prefer having text messages, rather than phone calls? Technology allows you to have flexibility in both communication and payment methods. Advanced tools allow agencies to automate repetitive tasks, such as tracking payments and sending notifications, meaning staff are free to focus on more complex tasks, improving overall efficiency.
• Geographic flexibility
  • Remote operations remove geographical constraints, enabling agencies to serve clients across the country, and overseas.

The move towards a remote world presents both obstacles and opportunities in the debt recovery space that most companies will have to adapt to in one way or another when chasing their own outstanding invoices.

Do you have some outstanding invoices that need chasing? Submit your debt through to us today.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 15/01/25

Managing debt is rarely easy, and understanding the legal aspects can make it even more overwhelming. One term you might encounter while dealing with unpaid debts is “statute barred debt.” But what does it mean, and how does it affect your financial situation?

If you’re feeling uncertain about your debt situation, keep reading to learn everything you need to know about statute barred debt and why understanding it is crucial to your financial health.

What is Statute Barred Debt?

Statute barred debt refers to debt that has become too old to be legally enforced. Under the Limitation Act 1980 in the UK, creditors have a limited period to take legal action to recover a debt. After this time passes, the debt becomes “statute barred,” meaning the creditor can no longer take legal action to enforce payment, even though the debt still technically exists.

Key Points:

• Time Limit: For most unsecured debts (e.g., credit card debt, personal loans), the time limit is six years.
• Debt Conditions: For a debt to become statute barred, no payments or written acknowledgments must have been made during that six-year period.
• Debt Still Exists: Although creditors cannot pursue legal action, the debt itself still remains on your record.

When Does a Debt Become Statute Barred?

For a debt to be classified as statute barred, certain conditions must be met:

1. No Payment or Acknowledgment: Six years must have passed since the last payment or written acknowledgment of the debt (five years in Scotland).
2. No Legal Action: The creditor must not have taken legal action (e.g., obtaining a CCJ) during that time.
3. Debt Type: The debt must be unsecured; secured debts (e.g., mortgages) do not qualify.

If these conditions are met, your debt is likely statute barred, and the creditor cannot legally force you to pay it.

How to Identify Statute Barred Debt

If you’re unsure whether your debt is statute barred, consider the following steps:

1. Check Your Payment History

If it has been more than six years since your last payment or acknowledgment of the debt, it may be statute barred.

2. Review Legal Action

Has the creditor taken any legal action, such as obtaining a CCJ? If so, the debt is not statute barred, and you are still liable for it.

3. Acknowledge the Debt

If you have written to the creditor acknowledging the debt within the past six years, the statute of limitations may have been reset.

Statute Barred Debt and County Court Judgments (CCJs)

It’s essential to understand that statute barred debt only applies if no legal action has been taken within the six-year period. Once a creditor has obtained a CCJ, the statute of limitations no longer applies, and the debt remains enforceable.

If a CCJ has already been issued, the creditor can take further steps to enforce the judgment, including using High Court Enforcement Officers (HCEOs), who have the authority to seize assets or recover payments from you.

However, if no CCJ has been issued and the debt is older than six years, you may defend yourself by stating that the debt is statute barred.

What Should You Do If You Think You Have a Statute Barred Debt?

If you suspect a debt is statute barred, here are the steps to take:

1. Review Your Financial Records

Check when you last made a payment or acknowledged the debt. This information is key to determining if the debt is statute barred.

2. Request Written Confirmation

Write to the creditor asking them to confirm when you last made a payment. Keep a record of all communications.

3. Send a Statute Barred Debt Letter

If the debt is statute barred, send the creditor a formal letter informing them that the debt is no longer enforceable under the Limitation Act 1980. This should prevent them from taking further action.

4. Seek Legal Advice

If you are unsure of your rights or how to proceed, consider consulting a solicitor or a debt adviser for guidance.

What to Do If You Have a CCJ for an Old Debt

If a creditor has obtained a CCJ for an old debt, statute barred rules no longer apply. In this case, you have a few options:

• Pay the Debt in Full: This will stop further enforcement action and may remove the CCJ from your credit report.
• Set Up a Payment Plan: Arranging to pay the debt in instalments can prevent further enforcement action.
• Challenge the CCJ: If you believe the debt should be statute barred or you do not owe it, you can apply to have the CCJ set aside.

For further help with CCJ enforcement or managing old debts, it’s essential to seek expert legal advice.

Understanding statute barred debt and how it impacts your unpaid debts is vital to managing your financial health. By following these steps and knowing your rights, you can navigate the complexities of debt management with greater confidence.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 22/10/24

Understanding Your New Clients

We’ve all experienced that rush of excitement when securing a new client. The promise of new business is invigorating—after all, it’s the lifeblood of sales! But before you dive in, ask yourself: How well do you really know your clients? Have you gathered the crucial information needed to foster a successful, long-term relationship?

Collecting this information can be tricky. You want to avoid awkward conversations that could put off your new client. For instance, it’s not exactly easy to ask, “Are you a late payer?” That’s a sure way to jeopardise the relationship before it even starts.

A New Customer Onboarding Form

A simple and effective way to mitigate this risk is by implementing a “new customer onboarding form” before you begin fulfilling orders or providing services. This form allows you to gather essential details that will help you assess the potential risks to your business. It’s an easy step that can save you significant time and effort in the future, especially if payment issues arise.

Key Information to Include

Here’s what you should consider including in your onboarding form:

1. Trading Name

• Distinguish between the registered name of the business and the trading name (if one exists for marketing purposes). For sole traders, ensure that your documents state the customer’s name followed by “trading as” their business name.

2. Registered Business Name

• This is the official name of the company, such as “ABC Limited.” It should be used in all formal communications. If you ever need to pursue an outstanding debt, having the correct registered name is vital. Verify this information on Companies House, where you can also find the company’s registration number and address. Be precise: list the company name on your documents exactly as it appears in the Companies House records.

3. Type of Business

• Identify whether the business is a sole trader, partnership, or limited company. This knowledge helps clarify the responsibilities of both the company and its directors. Also, be sure to gather contact information for the directors and the department that handles invoice payments.

4. VAT Details/Number

• Requesting the VAT number is another way to verify that the business you’re engaging with is legitimate.

5. Decision Maker(s)

• The person who places the order may not be the same individual responsible for paying the invoice. By separating this information on your form, you can gain a clearer understanding of your client’s internal processes.

6. Terms & Conditions

• Include your terms and conditions in the form, detailing your credit period, payment policies, and the right to charge interest on overdue invoices. Ensure your new client reads, understands, and agrees to these terms.

Building a Strong Foundation for Future Success

By starting with transparency and clear expectations, you lay the groundwork for a strong, positive working relationship. If a client hesitates to provide the necessary information, it might raise concerns about their reliability—what might they be trying to hide?

While you might feel uneasy about asking these questions, remember: a formal onboarding process not only protects your business but also enhances your professional image. Embrace this process as a way to ensure that both parties are set up for a successful and mutually beneficial relationship.

Ready to strengthen your client relationships? Start with the right questions.

Disclaimer: The information provided in this article represents the opinions and insights of Scott & Mears. It is intended for informational purposes only and should not be considered as professional financial or legal advice. Business owners and individuals seeking financial guidance should consult with qualified professionals to address their specific financial needs and circumstances. Scott & Mears disclaims any liability for decisions made based on the content of this article.

Published: 13/09/24