The Risk of Leaving a Debt Too Long

The longer an invoice goes unpaid, the harder it becomes to recover. Many businesses hesitate to pursue overdue payments due to uncertainty and fear of damaging relationships. But acting fast is key to keeping your cash flow and your business healthy.

The Challenges for SMEs

For small and medium-sized enterprises (SMEs), maintaining financial stability is becoming increasingly challenging. Rising costs, economic uncertainty and recent government policy changes - such as the autumn budget’s increase in National Insurance - have added further pressure on business operations. According to 365 Finance, 50% of SMEs relied on external financing in Q3 2024, a significant increase from 41% at the start of the year. This sharp rise offers just a glimpse of the growing financial risks SMEs are facing.

With tighter margins and increasing financial responsibilities, SMEs can’t afford to let overdue invoices accumulate. However, many businesses struggle to balance day-to-day operations while chasing late payments. With less time to chase overdue payments, debts are likely to build up over time. The longer these debts remain unresolved the more difficult they become to collect.

The Cost of Procrastination

Every overdue invoice represents money that should be in your business - fuelling growth, paying suppliers or reinvesting in your business management. So, it’s not surprising that delaying debt recovery comes with risks:

• Cash Flow Disruption - Unpaid debts strain cash reserves, making it harder to cover operational expenses.
• Increased Likelihood of Bad Debt - The longer a debt remains unpaid, the greater the chance it will never be recovered.
• Legal Time Limits - In the UK most debts become statute-barred after six years, meaning legal action to recover them is no longer an option.

Ignoring these risks can lead to businesses being forced to write off thousands in unpaid invoices, thousands that you could be using to grow and invest. 

The Solution: Proactive Debt Recovery

At Redwood Collections, we help businesses regain control of their unpaid invoices and restore financial stability. NatWest reports that 31% of businesses dedicate between 21 and 30 hours per month to following up on overdue payments. Partnering with a debt collection agency can save you valuable time and improve efficiency. Our experienced team uses a strategic, thorough and effective approach to debt recovery. We prioritise maintaining positive relationships while ensuring you receive what’s rightfully owed to you. 

We work alongside you to:

• Recover overdue debts quickly and professionally
• Remain mindful of your reputation with tactful, client-friendly communication
• Provide a seamless process that allows you to focus on your business

With our no collection, no commission structure, we’re committed to your success.

Every business deserves to be paid for its hard work. Delaying debt collection only increases risk and financial strain. Recovering overdue invoices doesn’t have to be a hassle - we take the pressure off, allowing you to act now and reclaim what’s rightfully yours.

We move quickly to protect your cash flow, minimise bad debt and strengthen your financial future. To discuss how we can support your business in recovering overdue debts, call 020 8080 2888 or fill in or online contact form.