There are a variety of ways of collecting debt, whether you choose to do it inhouse, employ a third-party or go through legal proceedings. With each of these comes a variety of advantages and disadvantages, and today we are hoping to enlighten you.

In-House Collections 🏡

If you have an in-house team dealing with your credit control, you may feel that it would be best to chase the debt yourself with the expertise they have in dealing with non-paying customers.

Pros

• Your team may already have a good relationship with the customer.
• They will know everything that has happened with the case as it has entirely been worked internally.
• This is a more personable approach.

Cons

• Time-consuming.
• Leave you short of time and resources.
• It may not be cost effective to employ someone within your company to do this – Think of the overheads.
• Uncertainty on success rate meaning that it may not be worth it.

Using a third-party 🤝

Instead of collecting your debts in-house, you may choose to use a third-party debt collection agency like ourselves.

Pros

• Debt collection companies have years of experience in chasing and collecting overdue invoices.
• It allows you to focus on other important things in your business, as they take the debt off your hands making it stress-free.
• Often the first letter from a debt collection agency will be enough to make the debtor pay prior to any further proceedings take place.
• Having expert support will help improve the chance of recovering the monies owed, especially for older debts as these become more and more difficult to collect.
• If the right third-party is chosen, it can be a very cost-effective solution, particularly if the company works on a No Collection No Fee basis like us!

Cons

• It may be daunting to trust an external company to act on your behalf. You must ensure that the debt recovery agency you use respects and protects your brand, as well as your customers, as though they were their own.

Legal Proceedings 💼

A refusal to pay may lead you down the path of taking the debtor through the legal system, offering a much firmer approach.

Pros

• Frequently the first letter warning of any legal action is enough to encourage payment from the debtor.
• It is an effective last resort option for a customer who is not paying.
• A good, experienced company will provide support and have specialists to help you through the process.
• Upon a successful claim, the court fees will be payable by the debtor.

Cons

• There is never any guarantee that your money will be collected.
• It can be daunting going through the legal system if you have no prior experience, this is why it is essential to choose a reputable company who can aid you through this process. At Scott & Mears, we have an Inhouse Solicitor as well as a Panel of other solicitors who can help you every step of the way.

Want some more information? Take a look our other blogs here or contact us here.

Published 6th November 2023