Factoring
Have you heard this line before when chasing
for payment of an overdue account: "It's just that the
two directors need to sign the cheque, and one of them is
out of town for three weeks". As unfair as it may seem,
some very large businesses do not pay their bills until they
have to, as it can be a cheap way to get a loan from you.
Typically late payment is not because your customers are
insolvent.
For many businesses outstanding invoices are
their largest asset. Overdue bills are a nuisance, expensive
to collect on your own and a distraction from what you and
your staff should be doing. A collection agency can efficiently
help recover overdue debt for you. Once a third party is
involved it is often the case that debtors pay faster.
The industry is very professional and large (over £3 billion turnover
representing some 17 million claims are collected annually). Various groups
of collection agencies exist:
- divisions of credit insurance and accounting and law
firms
- divisions within most of the large credit information
services
- companies small to mid-sized independently owned companies
- and as services offered by individuals (only few of whom
are responsible for the negative debt collection image)
Factoring is an alternative service, and depending
on your needs, more comprehensive than debt collection. Collection
agencies need to be licensed by the Office of Fair Trading
and are regulated under the Consumer Credit Act 1974 (and
subsequent regulations). There are also strict laws disallowing
harassment and other inappropriate means to collect overdue
debts.
CONTACT US by ringing 0207 407 8787 or
email us using the form below.
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