Debt Collection – What we are hearing from our clients
Regardless of which industry they operate in, clients are expressing to us a sense of dislocation from their usual business networks. Social isolation has meant that feedback from customers, practical guidance from industry associations and even gossip from colleagues has been harder to come by. Under these pressures it is easy to feel as though your business challenges are unique to you.
If COVID-19 has led you to put debt collection down your business priority list you are not alone. Most of the business owners we have spoken to are:
- Not commencing any new legal action against debtors, and/or
- Ceasing debt collection activities all together, regardless of whether the debtor has provided an explanation for the delay in paying.
The current pandemic has, and indeed should, cause a rethink of debt collection practices. However, this is not the same as abandoning debt collection all together. It is possible to continue a disciplined and rigorous approach to debt collection whilst taking into account the difficulties that your customers are facing in light of the current restrictions. You might for example consider implementing a freeze on accumulating interest on outstanding debtors until economic conditions improve. You may also consider putting certain customers on a “cash on delivery” basis for supply in respect of orders going forward, on the basis that you agree not to pursue amounts currently in debt.