Collecting Overdue Debt – Everything You Need to Know

Once a debt becomes aged, it can be much more difficult to collect. There are different ways of going about it, but do you know which will be the most effective for you?
Here are some possible options for chasing debts that are overdue, and the pros and cons of each.


If your company has a credit control team, you may wish to chase the debt yourself.

  • Your team already know and have relationships with your clients. The process will be handled within the business from start to finish. A more personable approach.
  • You can update your cash flow as it changes, as everything is completed in your knowledge and control at all times.


  • Chasing over-due payment is often quite time-consuming. If your company is small, dedicating one employee to collect debt can leave you short for time and resources.
  • Furthermore, limiting someone to just managing credit control will mean they have far less time for other jobs and responsibilities.
  • You may have to consider other overheads. It is not always cost effective to be paying a salary for someone to do just this, as it is so time-consuming and may only reap small benefits.

To find out more about getting your customers to pay, click here;


You may choose to reserve your company’s time and resources, and instead outsource the work.


  • Companies that specialise in debt collection should have years of experience and can often guarantee a full recovery of your debt.
  • Most debt collection agents, like ourselves at FJCM, are ‘no win no fee’ – so we only get paid if your debt is recovered.
  • They will take the process off your hands so you can focus on running your business.
  • Often, the mention of debt collectors to a debtor will be enough for them to pay before any proceedings take place, which can be incredibly time saving and cost effective.
  • The debt collection agency will deal with the uncomfortable money problems, so you can maintain a good relationship with your clients.
  • Different values and age of debt can vary in expense and difficulty to collect. Having expert support will help to reduce the cost where possible.


  • When chasing a very small debt, it may not be cost effective if what you collect wouldn’t cover the fees.
  • It can be daunting trusting an outside person to act on behalf of your brand to your clients. It is important to find a debt collector that will respect and protect your brand and customer relationships as if they were their own.

For more info on outsourcing, check out our latest articles!

Outsourcing Credit Control and How it Works!
7 Reasons to Outsource Credit Control

Legal Action

Customers who are set on not paying may need a firmer approach.

  • Often the warning of legal action – i.e. a ‘letter before proceedings’, will be enough to make a customer pay
  • Effective last resort option for a customer who fails to pay consistently
  • A good company will provide practical support and experienced specialists
  • If your claim is successful, the court fees will be refunded to you


  • Legal proceedings are often expensive and time consuming
  • There is no guarantee you will get back what you are owed as legal proceedings are sometimes unsuccessful, but you will still have to pay the legal fees.
  • Customer relationship will most likely be damaged
  • Potentially complex, lots of legal terminology that can be intimidating or daunting

It is always important to evaluate the cost and risk of each debt. This way you can best decide which process to take, to leave you with the most effective outcome.
After all, you don’t want to lose more money than you collect – whether that be in fees or by sacrificing valuable time and resources to chase the debt yourself, and potentially jeopardise your own business success.

Good luck!

Written by Elise Doyle