AccountingWEB members guide to dealing with bad debts. By Dan Martin

AccountingWEB members offer their top tips on how businesses and accountancy practices should deal with and prevent bad debts.

Following research showing that HMRC is increasingly using winding up petitions as part of its debt collection offensive, we asked AccountingWEB members how they manage bad debt. This article draws together their words of wisdom.

Good relations

Several members believe key to preventing bad debts is maintaining a good relationship with clients.

Continued...

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Comments
Steve Thornbury's picture

The missing step!

Steve Thornbury | | Permalink

There is a big step between Strict policy and Go to court.

You could consider factoring or credit insurance for example as a preventative measure to start with. If you don't have those in place and you have a problem with a debt you could also consider a Solicitor.

Alternatively you may wish to consider using a B2B Debt Recovery company. You may well wish to tackle the problem yourself, but whilst you are doing this you are not concentrating on doing what you are employed to do, IE Your work!

You should consider outsourcing this aspect of your business.
If anybody would like some more information on how we could help you to help your client please don't hesitate to contact me.

Regards

Steve White

I can help you!

Do you hate chasing 4 payment? Try www.Hateinvoicing.com

Do you hate chasing debtors? Try www.Thornburycollections.co.uk

Mobile :- 078 246 38570
Office :- 01443 224407

4Networking Area Leader For South Wales

Bad not to chase bad debts

Anonymous | | Permalink

I understand the commerciality argument of not pursuing legal action for smaller bad debts, but this is not good for the profession. By not taking legal action you are letting someone say your work was not worth paying (at least that amount) for, and that they don't really need to pay future advisors if they choose not to. If your bill is fair, why would you let it go without taking the small claims route? You only take legal action if your normal payment terms have been breached and you aren't getting anywhere by just asking for the amount, or getting a valid excuse other than they prefer to pay other people and use you as a free credit service.

The less money a client has, the more essential it is that they stay up to date with their bills or bankruptcy looms for them anyway.