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How Getting Debtor Details Right Avoids Costly Write Offs
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How Getting Debtor Details Right Avoids Costly Write-Offs

When it comes to recovering high-value debts, accuracy is everything.

The ability to collect what you are owed depends heavily on having the correct debtor information from the beginning. Inaccurate or incomplete details can lead to delays and increased costs, with some cases resulting in an inability to recover the debt at all.

For businesses managing high-volume accounts such as those in finance and procurement, ensuring debtor details are correct from the start is a crucial step in mitigating risk. Here’s why it matters and how you can implement best practices to prevent avoidable losses.

The Risks of Inaccurate Debtor Information

When debtor information is incorrect or incomplete, businesses can face serious consequences:

  • Delays in Recovery – Incorrect names, addresses or contact details make it harder to locate debtors, leading to prolonged recovery times.
  • Legal Challenges – If debtor information is inaccurate, legal action can be more complex, more expensive or even unviable.
  • Increased Costs – Chasing debtors with incorrect details often results in wasted resources and higher recovery costs.
  • Write-Offs and Bad Debt – In the worst cases, inaccurate debtor records mean debts cannot be pursued, leading to unnecessary write-offs.

Ensuring debtor details are captured correctly from the outset significantly increases the likelihood of successful recovery and protects your business from financial exposure.

Best Practices for Getting Debtor Information Right

To minimise the risks associated with incorrect debtor details, businesses should follow these best practices:

  1. Collect Full Legal Entity Details – Ensure you have the correct trading name, registered business address, and company number for corporate debtors.
  2. Verify Contact Information – Cross-check phone numbers, email addresses and key personnel details at the outset.
  3. Ensure Contracts and Agreements Are Accurate – Double-check that debtor information in agreements matches official records.
  4. Regularly Update Records – Businesses change names, move offices and restructure - keep debtor details up to date.
  5. Use Credit Checks and Due Diligence – Conduct credit reports to verify financial stability before extending credit.
  6. Maintain a Clear Audit Trail – Ensure all correspondence and agreements are documented to support recovery efforts if needed.

The Finance Sector: Managing Risk Through Accurate Information

For financial institutions and lenders, data accuracy is non-negotiable. When incorrect details are recorded, credit agreements, loan repayments and financial contracts can become difficult to enforce. Incomplete debtor records can lead to increased default rates and hinder a lender’s ability to recover funds.

Finance teams should:

  • Verify company registration details and creditworthiness before approving credit terms.
  • Maintain accurate direct debit or banking details to avoid failed payments.
  • Ensure all loan agreements or financial contracts contain up-to-date debtor information.

By embedding these checks into onboarding and credit control processes, finance professionals can significantly reduce the risk of uncollectable debt.

The Procurement Sector: Ensuring Accountability in Supply Chains

In procurement, inaccurate debtor details can create serious financial and operational risks. Many businesses rely on long-term supplier relationships and when invoices go unpaid due to incorrect details, it can disrupt supply chains and damage business continuity.

Procurement teams should:

  • Validate supplier details at the contract stage to ensure they are dealing with the correct entity.
  • Ensure purchase orders and payment terms align with registered business information.
  • Keep debtor contact details up to date, particularly in cases of mergers, acquisitions or restructuring.

By enforcing strict validation processes, procurement teams can prevent errors that lead to payment disputes and unpaid debts.

How Collections+ Can Support Your Business

At Redwood Collections, we understand that the success of high-value debt recovery starts with accurate information. Our Collections+ service is designed to support businesses in finance and procurement with high-volume debt recovery solutions that align with your existing processes.

If incorrect debtor details are affecting your ability to recover outstanding payments, our team can help. Call us on 020 8080 2888 to find out how Collections+ can improve your recovery rates and financial stability.

Learn more about how Collections+ can help your business maintain strong financial control in today's economic climate by visiting our dedicated Collections+ page.

Our eBook, Winning Solutions for High-Volume Debt Recovery is available to download for free.

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