When I give a presentation about legal recoveries, I usually start it by describing the various steps which a credit controller should take before referring an outstanding debt to their lawyer. Essentially, my recommendation is that the controller exhaust their own collection activity before passing the debt to us. Of course, what this will involve entirely depends upon that organisation’s individual credit control policy.
However, generally it will encompass:
Once I have finished the introduction, I say that the foregoing pre-supposes that the creditor’s house is in order and that perfection exists. So, my assumption is that all of the accounts being passed to their lawyers are “clean”; that they have been reviewed; that they represent the true balances outstanding; and are without dispute. So, basically I presume that when these accounts are being passed, “perfection” pervades. I imagine that when the debtor was contacted by the client, there has been an accurately detailed account history stated and that the actual amount due to be paid is, in fact, due.
However, we all know that perfection, whilst desired, is unlikely to exist. But if it did, then the chances of successful recovery will immeasurably improve. Whilst we know that precision may be the nirvana, reality has to pervade and credit controllers must face the reality that their ledger of “outstandings” may not be as unblemished as it should be.
So, during this period of lockdown, what steps should the conscientious credit controller take to review the ledger and improve their recovery prospects?
Here are a few pointers which I hope you will find useful:
If you follow this advice and cleanse your sales ledger, this will be time well spent. It will mean that when the time is right and you do want to recommence chasing your outstanding accounts, then all of the information which you have will be up-to-date and accurate. This will translate into a far greater recovery rate and ultimately a reduction in your debtor days. It may even mean that your requirement to refer to third party for collection will be dramatically reduced.
However, if all else fails and you do need to make that referral, then Yuill + Kyle is here to help with all of your credit control and debt recovery needs, whether this be pre-legal, legal action or post judgment recoveries.
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