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Chasing Debts as a Small Business

Every business, large and small, will at regular intervals have to become a debt collector and run around after unpaid bills and invoices. Sometimes it will be because of a payment slipping through the cracks, sometimes it will be basic negligence and on rare occasions it will be purposeful with people deliberately trying to avoid paying you. 

So what advice is there for someone chasing up these debts? Below are a few suggestions.

Consider hiring professionals

The FSB Insurance Service has arranged for a discounted debt recovery service from STA International to help address this issue. For outstanding debts, it can be an excellent idea to outsource the collection.

Obviously, getting a third party to collect debts for you will cost, but the time it can save is often worth it. Also, a more experienced debt collector can often get better results than yourself if you’ve not had much experience chasing up on unpaid debts.

Remain initially friendly

A lot of the time, a debt isn’t paid because of an oversight. Perhaps an invoice has been filed in the wrong tray, or put to one side and forgotten about. It’s not terribly professional, but it is an easy mistake to make so giving your debtors the benefit of the doubt, at least initially, can clear the problem up early on.

If you call up to chase up on a payment and remain friendly without putting an implication of blame on the company that hasn’t paid up, they are much more likely to help out and not be resistant to your request.

Build payment terms into your invoice

This is a tactic that you can use before you file an invoice, so might not be very helpful if you are already chasing up on a debt. Often you can get those you do business with to agree on payment terms and to pay within a certain time frame.

This not only gives you a better indication of when you should start chasing up on unpaid invoices, but it should clear up any ambiguity over when companies are going to pay you. If you come across someone who absolutely can not meet your payment terms, at least you will know about it ahead of time and you can work out any issues before they start hurting your bottom line. If you know a payment will be later than you would like, you can at least plan for it.

If you’re not familiar with it, perhaps look into the 30 day prompt payment code. Signing up to this can give you a little more ammunition when it comes to dictating payments terms. Something similar to it also has the possibility of becoming law, judging by some of the statements made by David Cameron lately.

Know when to give up

Sometimes, you are never going to get your debt back. Debt law is some of the oldest law in the UK and a debt is always a debt until it is paid off, so legally you will have excellent ground to stand on. However, in reality, if someone isn’t going to pay you, they’re not going to pay you. Sooner or later these non-payers are likely to go out of business, go bankrupt and then you just become another debtee in a large pool of other creditors. You might get some of what you’re owed, but it is unlikely you will get all of it.

Knowing when to give up is difficult. Persistence is crucial up to this point, but sometimes you will just have to write the debt off, learn from the experience and do what you can to avoid it happening in the future. Every established business will be able to list a handful of examples where someone has not paid up and recovering that debt has been calculated as throwing good money after bad.


It is worth re-iterating that normally, an unpaid invoice is the result of forgetfulness, a mistake, negligence, or a simple lack of urgency rather than anything malicious. A quick phone or email call can normally clear things up in minutes.

As for those times where things do get more complicated, you can of course always contact our own helpline too.



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