International Debt Recovery – Mitigation of Risks
It is a fact of business life that from time to time, you will have a customer who doesn’t make their outstanding payments, ignores your two or three reminders and your letter before action and misses these opportunities to settle the balance. This is never an easy situation and it can be particularly tricky if your customer is based overseas, as every country has different rules concerning the collection of debt.
So, what can you do to mitigate the risk of ending up in this situation? One way to reduce the likelihood of a debt going bad is to take appropriate precautions before you offer credit.
The importance of credit checks
A thorough credit check is a good starting point. If your customer is a limited company, you don’t need their permission to run a credit check, although you will if they are a sole trader. A credit check can provide an excellent insight into that company’s financial state and may also tell you if they have been involved in bad debt situations in the past. Some debt collection agencies and one or two credit reference agencies will perform credit checks on overseas firms
Credit application form
Ask your customer to complete a credit application form. This can enable you to obtain important information about the company you are dealing with, including contact numbers and details. This information can be particularly useful when it comes to international debt recovery.
Always check references
If you’ve asked a customer for references, make sure you follow these up to ensure that they are not bogus. Some time spent on your favourite search engine and checking out the company websites should help confirm whether the references are real, and you can also get in touch with the referees to find out how well the company meets its financial obligations.
Find a reputable debt collection agency
If your work involves international transactions, it can be a good idea to take on the services of a reputable debt collection agency. The best agencies will charge no fees upfront and will work on a no fee basis until they collect the debt. Check out the reputation of any debt collection agency you are considering using, and only take on an agency that is a member of the Credit Services Association (CSA) in the UK, even if you are seeking to recover international debt.
If you have an international debt that you want to recover, get in touch with us today and find out how our professional no-collection no-fee service can help you to resolve your bad debt problems.
For more information, get in touch with CLI, specialist in International Debt Recovery and International Letter Before Action.