Understanding the situation
For businesses, unpaid debts can accumulate across multiple customers or suppliers, making a structured approach important. Some debts arise from straightforward late payment, while others involve a dispute over goods, services or a broader commercial relationship.
How a business approaches recovery often depends on internal credit control practices, the size of the exposure, and whether preserving the customer relationship remains a priority.
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Possible options
The appropriate combination depends on the amount involved, whether the debt is disputed, and the debtor's apparent financial position.
- A structured internal follow-up process, escalating from friendly reminders to formal demands.
- A formal written demand or legal notice addressed to the debtor company or individual.
- Exploring a documented settlement or payment plan where the debtor acknowledges the amount owed.
- A court-based process to seek an enforceable decision, and, in appropriate circumstances, consideration of protective measures where there is a genuine risk to recovery.
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Practical steps
- 1Maintain organised records of contracts, invoices, purchase orders and communications for every customer or supplier relationship.
- 2Set clear internal timelines for following up on overdue amounts.
- 3Escalate methodically: reminder, formal demand, then consider further options if payment is not made.
- 4Document every response from the debtor, including any dispute raised.
- 5Take advice before pursuing a court-based process, particularly for larger or disputed amounts.
