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Outsourced credit control: Notice of Assigment?

I am looking to introduce outsourced credit control as a service.

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As far as I have currently planned, I don't expect this to be an third party debt collection.  I'm not purchasing debts from clients but chasing them on their behalf, amongst other credit control functions.

My question is, if I haven't purchased the debt, should I need to issue a notice of assignment to each debtor?  I don't think it falls within the legal requirement to do so but I'm open to being mistaken!

Cheers and best wishes



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31st Jul 2018 14:26

I would say not as any payments will be made to the client rather than you.

Good look with it if you do, I did it for a few clients years ago and it was a nightmare. We chased the debts professionally and courteously and ended up falling out with a few clients when their clients started [***] to them because "they always paid, even if not to terms", and took umbrage at being chased. The clients were also a pain, as they were forever on the phone asking where their money was.

For me it wasn't worth the hassle and the amount of time it took up for the income we were getting for the irritation.

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31st Jul 2018 15:47

Ditto what Rob said.

My clients are all fab, but my a large chunk of my clients clients are total morons! Nightmare job. But if you enjoy it then all the best with it.

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31st Jul 2018 16:27

Hi Bert

As long as the money is being paid as normal to your client's bank account you don't need to issue any notice of assignment. As they are simply outsourcing the task of credit control to you. It remains their money.

At Chaser ( we work with lots of accounting partners as the software platform to help them deliver outsourced credit control to clients.

In case of interest, one of our partners recently asked whether they needed to be regulated to offer outsourced credit control to clients. This was the answer we provided:

You do need regulatory approval to engage in formal debt collection but not to carry out credit control as a process.

Debt collection/management particularly where you are collecting debt as a result of credit agreements is a regulated space by the FCA. Our partners who use us to provide outsourced credit control specifically state that they are not providing this.

You would be providing the administrative service of credit control, which is not regulated. Bodies like the CICM have a stated best practice but are not a regulator in the way FCA would be if doing debt collection. You could partner with a debt collection (once invoice is bad) agency in future if there is demand for it from clients.

I hope this is useful. If you would be interested in speaking more please contact us at [email protected]. We'd love to speak!



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