{"id":183503,"date":"2023-10-20T04:35:09","date_gmt":"2023-10-20T03:35:09","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=183503"},"modified":"2026-06-29T07:56:02","modified_gmt":"2026-06-29T06:56:02","slug":"debt-recovery-process","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/disputes-litigation\/debt-recovery-process\/","title":{"rendered":"How to Implement an Effective Debt Recovery Process"},"content":{"rendered":"\n

A debt recovery process is the set of steps a business takes to collect money owed when a customer fails to pay an invoice. In the UK, the Late Payment of Commercial Debts (Interest) Act 1998<\/em> lets businesses charge statutory interest at 8% above the Bank of England base rate, plus fixed compensation, on overdue commercial invoices. The Limitation Act 1980 <\/em>gives you six years to recover a debt through the courts. The government confirmed major late payment reforms in March 2026, including a 60-day cap on payment terms and mandatory statutory interest in commercial contracts. A strong process moves from prevention, to informal chasing, to formal legal action. This article outlines the key steps you can take to implement an effective debt recovery process.<\/p>\n\n\n\n

Why Should Businesses Have a Debt Recovery Process? <\/strong><\/h2>\n\n\n\n

There are several reasons why customers do not pay for goods and services on time. Some reasons may be entirely genuine, such as the customer’s financial problems. Nevertheless, having a debt recovery process in place to deal with these problems is vital. After all, if several customers fail to pay, your business could be in trouble.<\/p>\n\n\n\n

There are several ways to recover debt. The methods involved can be informal, but there are also various legal options to help you recover debt. From the outset, every business should have a plan to tackle this common issue. Below are some key strategies you can include in your debt recovery process. <\/strong><\/p>\n\n\n\n

1. Research Your Customers <\/h2>\n\n\n\n

Before you work with new customers, it is worth carrying out due diligence on them. Research them to see how long they have been established. This will help you gauge whether they will be good customers who will pay your invoices.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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