MULTIMODAL PREVIEW\\\ The road to recovery


those


Unpaid invoices can aff ect the balance


sheets of transport


businesses. Grant Murray of debt recovery agency Redwood Collections gives his views.


It is a sad fact of the freight, haulage and transport industries that non-payment of invoices is an acknowledged recurring problem. This can particularly be true for independent fi rms. Cases frequently involve problems issues further up or down the supply chain causing a knock-on eff ect, oſt en with complicated contractual issues causing your customers to point their fi nger elsewhere. But for you, the company out


of pocket, this point of view is of course completely unreasonable. The bill should simply be paid and the dispute sorted out among the other parties. Aſt er all, your company has carried out the job expertly and professionally and you are entitled to timely payment in return.


The current solution


When all eff orts to mediate, grant further time or perhaps even arrange payment over a few instalments have failed, you may look to the court system to try and enforce the now overdue debt. However, we have found that many of our transport industry clients have grown frustrated at the length of time a typical County Court action can take. Tight paper trails, concise


documentation and properly signed and completed agreements by all parties can go some way towards strengthening the case, but winning judgment in your favour is oſt en the easy part. The process will oſt en be slowed down by the myriad excuses a defendant can throw at the system to deter the creditor, including spurious defences, adjournments, multiple court attendances and then a high volume of enforcement failures. Another factor is the little-known


but very important Pre-Action Protocol for Debt Claims which came into force in October 2017, making it more time-consuming to take debtors to court. If a county court judgment (CCJ)


is obtained, you may fi nd that court bailiff s possess little incentive to recover money from the debtor, their eff orts usually resulting in an all-too-easy application being


made to waive the bailiff ’s warrant and pay the debt via instalments at a derisory rate. Privately run fi rms of High Court Enforcement Offi cers may return better results, but the reality is less eff ective than television shows may lead you to believe. In other words, despite all this


eff ort, money goes uncollected, and further money is wasted in the chase.


Another way


Outsourcing your credit control can take away the hassle of constantly chasing the same customers again and again, granting more time to focus on business development and other important factors. More oſt en than not, an experienced debt recovery agency can arrange payment in full, an amicable settlement or an agreeable repayment plan without recourse to law. Redwood’s approach is to


engage the debtor in dignifi ed and constructive discussion from the outset. This puts an intermediary between you and your customers and helps to eliminate invalid reasons for non-payment. In many cases, Redwood’s team


can resolve issues and recover debt immediately or arrange instalment plans designed to suit both parties. One good telephone call from an experienced collector can be worth a handful of letters or a premature legal action. An authorised debt collection agency (DCA), regulated by the Financial Conduct Authority, will know the regulations for appropriate contact with debtors and can therefore operate outside normal working hours to maximise the opportunity for contact.


What about stubborn debtors?


In persistent cases there is an alternative to the County Court that achieves maximum value for money when issuing legal action. We continue to see great success with county court claims but sadly it seems the stigma that was once associated with the burden of


Issue 4 2019 - Freight Business Journal


carrying a CCJ has waned slightly. For


customers who


seemingly work hard to avoid their responsibilities, the service of a Statutory Demand, issued in accordance with the Insolvency Act 1986, could prove an extremely eff ective step. This is the initial stage towards a Winding-up Petition. Unlike a County Court Claim, this document does not invite debtors to make soſt off ers of repayment, neither does it openly invite disputes or require a


Court attendance by your fi rm or a solicitor on your behalf. Providing the case meets


stringent criteria, you are entitled to instigate the service of this precursor notice of an intended petition. The eff ect can be extremely stark as the implications mean


the debtor company’s


assets and creditworthiness are potentially brought into doubt. Any costs associated with legal


action or referring the debt to a DCA may be reclaimed if covered


in your contractual terms, or under the Late Payment of Commercial Debt (Interest) Act 1998. With the appropriate wording being introduced into your contractual terms


and conditions, any


reasonable third-party collection costs, howsoever incurred, may be reclaimed from your debtor, pre or post legal action. An experienced DCA will be


able to draſt a suitable clause for insertion into your terms. Indeed, this


is a service Redwood has


19


provided for some years. Firms may also wish to seek guidance from their industry bodies such as the Road Haulage Association in this regard, as they oſt en keep template terms and conditions for members to use. If transport fi rms are armed with


modern credit control tools and up-to-date knowledge, a great deal of hassle and money can be saved down the line, in terms of both prevention and recovery of unpaid debt.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40