Top tips for tracing business debtors

By: Anita Brook

Date: 31 August 2011

In business, companies provide products or services to customers and if all goes well, you have little cause to actively chase for payments.

Unfortunately, you may face a situation where a debtor simply seems to vanish.

Prevention is better than cure

There are a number of things you can do to reduce the likelihood of a client going astray.

  1. Collect detailed information about your client at the start of your working relationship. Make sure you have the company’s full address, phone number and a named contact - you may also need the details of accounts department information for payments.
  2. Run a company credit check.This will tell you if the company has a good payment relationship with other suppliers. You can run a credit check using specialist software such as Experian Business Express or via online services like those offered by First Report.
  3. Keep track of your customers. Regular contact with clients - particularly those who have outstanding debts - will mean you quickly become aware if something is not right or if they have suddenly relocated.

If a debtor disappears

If your protective mechanisms fail and a debtor vanishes, there are still things you can do to trace them:

  1. Run a credit check again. This may reveal a more recent trading address than you have on your records.
  2. Check with Companies House. You can run an online search to view the current registered address of any active company.
  3. Send a reminder by recorded delivery. If you are receiving no response, or letters are being returned by Royal Mail marked “No longer at this address”, it doesn’t mean the company isn’t there. Send a letter that requires a signature will give you an idea if they’re simply hiding.
  4. Contact the local Royal Mail sorting office. If the company has indeed moved on, Royal Mail may have a forwarding address for the company.
  5. Contact other suppliers or clients. Have a look on the company’s website or marketing material and see if you can identify any other suppliers or clients who may hold a forwarding address.
  6. If all else fails, seek help. If your chase leads you nowhere, you may wish to seek professional advice from debt collectors. They track and trace companies and individuals on a daily basis using a variety of methods, and could help you re-establish contact and recoup the payment you are owed.

Anita Brook is MD of Debts Assist, a credit control and debt recovery firm, which helps businesses improve cash flow while keeping business relationships intact.

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