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Advice For Chasing Debtors

This post was originally published on Sian Phillip’s blogs

Debt collection is not a nice job but a necessity to keep your business going. In these hard times it’s a task that seems to be more prevalent to businesses everywhere. Many years ago in my first ever job I did quite a bit of debt collection and have done since then on and off – quite successfully. I’ve recently picked up some work chasing debtors for a local company and it got me thinking it’s worth writing a blog to share my experience. I hope this is some help for those chasing up debtors.

Before starting your calls

  • Make sure the invoice is correct and has the payment terms on it, i.e. how many days until the payment is due. This would normally be agreed before doing the job however sometimes the sales team and accounts aren’t always singing from the same song sheet. Surprising how many invoices are “wrong” so you have to start from scratch.
  • Email the invoice as well as posting it.
  • Give lots of options to pay if possible – bank transfer, paypal, credit card, cheque in post etc. List all payment options on the invoice and/or email.
  • Send statements out monthly or bi-monthly – email and post.
  • Have a debtor list to work from when you start your calls, maybe on Excel or handwritten if you prefer. Keep the list updated with payments received and new invoices to chase – makes it easier if on Excel.
  • Ensure you have the invoice date, invoice number and amount that you are chasing – all the better if there are further details like the work provided.
  • Where possible have contact details – telephone number, email and the person to speak to who knows what you are chasing.

When making calls

  • Keep a record of every call/email on your debtor list – the date, who you spoke to and what was discussed, even your personal thoughts on it. This is invaluable as you can refer back to it if you need to call again.
  • Understand that times are hard for everyone these days and the person receiving the call may be stressed. So start off nicely and be diplomatic. I find that being nice and understanding from the beginning earns respect and will hopefully make the person be truthful with you – which always helps. Plus maybe they’ll then prefer you to the hard nosed debt collector for another company and you’ll get paid first.
  • If someone says the cheque will be posted today/tomorrow then follow up 4 or 5 days later if not received.
  • Keep on the case – if they sense you don’t think of it as important then of course they’ll delay.
  • You’ll know after a few calls if you are being messed around or not and when to start being harder on the phone. Repeating what has been said previously sometimes works as they realise they can’t get away with any more excuses.
  • Always be polite – it gives you the upper hand.
  • Be prepared to be flexible. Maybe the only way they can pay is in instalments and this is better than nothing.
  • If it has got to the point where you feel there is no other option then threaten legal action – ensure this is done in writing too so you have a record of it.
  • If you really have to go down the legal route then discuss this further with your solicitor – I’m not in the position to give legal advice here.

And a tip for the person being chased for money…

Always be truthful. It really does help. If you tell me that times are hard and can I give you an extra week or two then I will. And I won’t chase you during that time. But stick to the promise or don’t make it. If you say you’ll post a cheque tomorrow with no intention of doing so then expect another call from me within 5 days and the more often I have to chase because I’m lied to then the sooner we’ll be going down the legal route.

I hope this is of some help to those having to chase debts up. It is one of the services I offer so if I can help further please let me know.

If you have any other tips for debt collection it would be great if you can share them here.

Sian Phillips is the Managing Editor of and Content Editor on Sian is also the accountant for her clients and but is moving more and more into the content editing world; proofreading and editing blog posts, eBooks, novels and anything that is written. With over 25 years’ worth of experience in business and accounting Sian provides help to her clients with accounting and credit control. The other half of Sian’s day is spent working in the Social Media space; proofreading, copyediting, sharing posts and advice or conducting interviews for She is a qualified Accountant with an Honours Diploma in Journalism too.

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  • Great post Jackie! Thanks for sharing. The situation is so true. If you ask several business owners about their business plan, you’ll find out that they either don’t have business one or have vague versions of it.
    Thanks in advance for avoiding “SMART, PESTLED and SWOT”. It’s the jargon that scares many people starting in business.
    I think that working our “your number” is also extremely important, especially when you can’t visualise exactly what success looks like. That way at least, you know if you are or not on track 🙂
    Best advice is to see as far as you can, try as hard as you can to see what will success be and work backwards. Then, you can start breaking down your goals in periods of 6 months (or quarters).

  • Hi Jackie,
    Just popped in to see what was going on in Bloggertone, as a treat to myself to break from within the entrails of my new Business Plan. So great timing for me, I thank you for that.
    It is so easy to get bogged down in the PESTLEDs and STEEPs, it easy to lose the basic picture – how much money one wants to make (Your Number!). I do believe in SWOT tho – easy enough to guess and is a great thinking exercise.
    Something that is left out of many “templates” is a vision and mission statement – once this is written and agreed, everything works from that (including THE Number).
    This has been a great read amongst all the paperwork in front of me here, thank you!
    I have just figured out my break even point – and it’s not so scary – that was a great positive so far, and realising what my vision really is!
    Excellent post!

  • Hi Elaine
    I absolutely believe in the value of a SWOT too – I even use a personal SWOT with coaching clients – and I would hope that people who go through the process I described will have a strong sense of their strengths, weaknesses, opportunities and strengths at the end of it…without even realising they did a SWOT. I am less convinced by the need for a Vision and Mission statement – especially for very small business – although I believe everyone needs to have a “vision” of where they want to get to…again I just feel that the terms get in the way of people thinking and doing

  • Fred, thanks for your comments. I absolutely agree that words like SMART, PESTLED and SWOT scare people and not just the newcomers to business. I really hope this post prompts a few to just sit down and think things through – it is like winning a race – if you don’t know where the finish line is and haven’t visualised crossing it and how you are going to achieve that, the chances of you winning are pretty poor.

  • By the way folks, since I submitted this post I have launched a short survey of SME business owners on the year ahead. If you haven’t completed it yet and you are an SME owner, please do – it will only take 1 or 2 minutes (I promise). I hope to have results later this week.

    To complete the survey

  • Anonymous


    I have spent most of the past few days working with clients to calculate their NUMBER. Its catching on. I have started a discussion on my LinkedIN group “The Finance Expert” on MY NUMBER.

    John Crawley

  • Hi Sian, This is advice all small business owners can do with right now, I’ve had my own problems with getting paid in the last twelve months. I think you’re point about showing understanding is well made, unfortunately many businesses and business people are in a similar position, in that they must first get paid before they can pay their debts. I also know that obtaining credit was suddenly made a lot more difficult by the financial institutions which has made things even more difficult. Great advice! Thanks for sharing, Niall

  • Nice one, Sian, nnI worked on Cash Collections for an outsourcing firm yonks ago u2013 from a process improvement perspective u2013 and one of the techniques that worked best was to send reminders with different levels of importance, eg if you donu2019t do this, the following will happen etc…nnOne pattern that emerged was that the more you u2018naggedu2019 with reminders u2013 especially hardcopies u2013 the faster the payments. nnFor self-employed folks this can be v time-consuming, which is why handing it over to specialist firms makes sense… and saves money. nnIvann

  • A very helpful post, Sian! I’ve experienced a few problem clients who commissioned work with really no intention of paying – it’s difficult and time-consuming but sticking to your guns shows clients, and often acts as a reminder to yourself, that your time and skills have a value. Having a formal agreement in place at the start, stating what work will be carried for what fee – inclusions and exclusions – clarifies expectations on both sides and makes for a stronger case if problems should arise. The most important thing to remember is not to get personal – especially if you are a sole trader and having to handle every part of the business yourself. Retrieving money may mean making your next mortgage payment or not, and frustration levels may be high, but it is important to always act from a place of professional detachment and integrity. As you say, it gives you the upper hand and ensures the discussion always stays on topic – even when being scrupulously polite, I’ve experienced clients who attempted to shift the goalposts in this way!

  • Good post Sian. Unfortunately some people such as tradesmen who run their own businesses often don’t work with invoices. This can make debt collection almost impossible if the person is unwilling to pay no matter how good the work is. Most of the time they are relying on simple good will.

  • Thanks for the comment Conor. Unfortunately speaking from an accountants point of view the tradesmen should raise invoices. Maybe use a bookkeeper if they can’t do invoices themselves. They’ll then find payments easier to get in and will easily cover the cost of delegating the work to a bookkeeper

  • Thanks for the comment Angela. You’ve made some great points about ensuring an agreement is in place before the work is done too. And not to make it personal.

  • Thanks Ivan. Yes reminders and statements work well too. However I’ve always found the phone call works the best of the lot – and keep the calls going regularly so they know you mean business. It does help being able to call from different numbers sometimes too 🙂

  • I remember watching someone in credit control while on work experience and then getting a similar type job in a much smaller company a few months later. I got their debtor days down from 180 days to 40, mostly becasue I followed the type of advise you outlined above. I would also get the financial controller to go and let the company know that he was on his way to collect the promised cheque (or somethimes bank draft). Someone that important was rarely refused. Great practical advise Sian, staying calm and polite makes a HUGE difference.

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  • Perhaps the number one advantage of debtor finance is it allows organizations to actually regain money and spend it in other activities, for example putting it then back directly into the business. Every time a business enterprise is owed money by debtors it fundamentally has got the money, nevertheless must wait for it to get it paid for to them.

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  • Richard Grant

    First, I agree that keeping it polite, friendly, but professional is important. Often, the debtors do not pay not because they don’t acknowledge the debt, but because they can’t pay it. Often then need a bankruptcy — but sometimes can’t admit it to themselves. Involuntary bankruptcy can be an excellent collection tool.

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