All companies, and the divisions within them, have to work to a structured budget. Accounts and collections departments are no different.
We all know that collection of outstanding accounts costs your company both time and expense.
In the past, the more effort you put into collecting what had become a bona-fide debt would cost you more time and administration, and hence greater cost. To the customer, who does not intend to pay, or is prepared to delay payment for as long as possible, no end of letter writing or bombarding them with overdue statements will cause a result. For this type of customer there is only one answer – threaten legal action and carry it through.
Of course First Collect, despite its tried and tested methods, can never guarantee collection. Whilst the intervention of an independent professional collection agency will bring a good measure of results, you will still be left with that group who have no intention of paying and whose nerve is unlikely to crack until that summons arrives.
But should the potential cost of issuing that summons cause you to, in effect, come to the end of the road?
We realised that our clients were then back in the old days of being faced with the questions: Should we call it a day? Why throw good money after bad?
Having recognised this predicament First Collect set about finding a solution.
Now, via the mechanism of insurance, we have negotiated a unique cover, which is exclusive to First Collect. This has been arranged with the UK’s largest legal fees insurer, a company with many years standing of addressing the cost of legal fees and making them affordable to all. They will cover the cost of issuing proceedings where ultimately the debt is still not recovered.
Of course this will cause an even greater level of recovery, but can you quantify that against the cost you would have to bear? Don’t forget the courts and the solicitor involved will charge regardless of the outcome.
Now you can turn that unquantified cost into a fixed cost to your business, and as we all know a fixed cost will never skew your budget into overrun; it is the variable and unknown costs that do that.
You can therefore avoid the following potential scenarios:
- Costs resulting from an unexpected drop in recovery levels prior to taking legal actions.
- The cost of writing off debts you chose not to pursue in the past.
- The legal expenses overrun following an unanticipated increase in unsuccessful legal actions.
The legal expense cover works on the basis that, for a nominal premium charge, you can insure your debts in the event that legal action is required. For large volume clients you may choose only to insure a proportion of your debts. The overall result being that you know what legal actions will cost on an up-front basis or, for larger clients, fix how much of your budget you wish to allocate to starting legal action.This facility has been negotiated and is operated by our own in-house broking company.