Economic pressures are not exclusive to the UK. Many other countries are experiencing increased costs, rising interest rates and a slowdown in consumer spending.
In the current economic climate, there’s increased risk of customers struggling to meet their financial commitments or going out of business, so you don’t get paid at all.
There are additional challenges when it comes to international debt collection and, according to recent research by credit insurer Allianz Trade, the number of UK exporters anticipating an increase in the risk of non-payment rose from 27% to 43% year-on-year.
So, how do you keep a tight rein on your overseas debt? Fortunately, there are some simple measures you can take to reduce the risk of late payment or debt default. And if you’re still struggling to get paid, engaging the services of a professional debt collection agency (DCA) could be the way to go.
Here are our top tips for dealing effectively with international debt recovery.
Dot the i’s and cross the t’s
Attention to detail is a golden rule of trading in overseas markets. Get an official purchase order or at least ensure the order is in writing. Make sure all your invoices are accurate, with no key details missing. Send them to a named contact – either the person who made the order or an individual with purchasing authority.
You should also ensure you’ve given the customer every opportunity to pay. Include your International Bank Account Number (IBAN) or consider opening a local bank account in a territory where you trade regularly. Alternatively, use an online payment processing platform – our website has a dedicated ‘Make A Payment’ page.
Take action quickly
Once you’re aware that a debt is overdue, it’s vital to act promptly. It could be a simple oversight and a polite message to the buyer or accounts team will do the trick.
If you get no response at first, be persistent. It’s important to show that you’re on top of the situation. An unscrupulous debtor might interpret your lack of communication as an opportunity to delay payment even longer.
Be flexible
Some overseas customers may appreciate the option of flexible payment terms. You could negotiate longer credit terms for certain valued customers or accept stage payments in respect of an overdue debt. There could be an impact on your cash flow, but these are certainly better outcomes than not getting paid at all.
Why using a debt collection agency could be a good option
Chasing international debts can be time consuming, distracting you from the important task of running your business and winning new customers.
Do you lack the time or resources to chase overseas debt effectively? Are you getting no response from the debtor, despite your best efforts to get them to pay up? If so, it could be time to bring in the professionals. A good DCA will have a strong track record in international debt recovery. They’ll also have a network of trusted partners across the globe who can provide local expertise and the ability to speak the debtor’s language.
Simply naming the debt collection agency in communications with the debtor can sometimes be very persuasive. They’ll be aware that the DCA is likely to have local representation and they won’t be able to use distance or language barriers as an excuse to avoid timely settlement.
Experts in international debt recovery
At Redwood Collections, we offer a global debt recovery service that's FCA regulated and fully GDPR compliant. Our expert UK-based team can achieve excellent results by chasing international debtors directly. We also work closely with a network of trusted overseas partners who can support us where the process is complicated by local culture, language or legal issues. With Redwood on your side, your business can trade internationally with confidence and Grow Stronger.
