A guide to debt collection in commercial disputes

In this blog we take a look at the steps small businesses without invoice insurance have to go through in order to recover unpaid invoices

For too long, high growth companies have had to put up with late payments as part and parcel of running a business. Many companies focus most of their attention on sales, and whilst these are of course important, you also need to ensure that you’re getting paid for work that you’ve already done and not losing out on money you’re owed.

Debtors usually owe money because they either don’t want to pay or don’t have adequate money to. Here’s our guide to trying to reclaim your funds:

Give them a call

You can’t always be sure that an email or letter has reached its desired recipient. Pick up the phone and speak to someone to double check whether your invoice has been paid.

Send a Letter Before Action detailing Final Action and Demands

If you can’t get a clear answer or know payment hasn’t been made, then make your debt recovery official by putting it in writing. Include the outstanding amount and stipulate that if payment isn’t received within a certain timeframe (we recommend 7 days), then court proceedings will follow. Threatening legal action is often a wake-up call that results in payment.

Still no payment?

Try to find out why. Is it a cash flow problem? If so perhaps suggest they pay in instalments or renegotiate the terms of another of their contracts. Be aware that handing over to a third party can risk losing the customer for good, and/or not receiving your funds.

Court proceedings

You can register claims with the County Court Business Centre, or CCBC. Claim forms will be received swiftly if you do this. You may want to consult a solicitor if the case is being defended, although this isn’t very common. Do take caution – when claims are of a high value the loser usually pays the winner’s cost, so there’s always an element of risk.


Sometimes defendants don’t respond to claims and so you can ask the court to enter judgement ‘by default’. Essentially this means that the debtor’s silence allows you to request immediate payment.


Debtors have a window of 28 days to make payment, otherwise a County Court judgement will be entered onto the County Court’s Register. The debtor will have this judgement on record for 6 years and it can affect their borrowing applications. In addition, any associated costs you have incurred from obtaining the Judgement fall on the shoulders of your debtor.


If the debtor still hasn’t paid after you’ve got your judgement, then you can enforce the judgement. Relevant forms from the Court office will be provided should you reach this stage. The process is long, and can involve Bailiffs and High Court Enforcement Officers, Charging Orders, Third Party Orders (if the debtor is also owed money from others) and in last instance, court attendance.

Lessons to be learnt?

Even summarised, we couldn’t boil the debt collection process down to less than 7 time consuming and complex steps. Commercial debt collection can be a long, drawn out process for high growth companies with more pressing business development priorities to embark on. But if you had invoice insurance cover then any potential losses due to client insolvency or protracted default would be reclaimed by our network of underwriters. No expensive and stressful processes involved. No time lost.

Most debt collection agencies advise that the earlier they get the debt, the earlier they can reclaim it. With invoice insurance cover, all of your invoices are insured from the beginning. Our network of credit specialists advise you about any potential bad debt losses, not the other way round. With invoice insurance there is no need to fork out for unforeseen costs at short notice – you have absolute peace of mind that all your activity is covered and that you’ll get paid each and every time.

Save yourself time, money and stress. Take out invoice insurance today. We’d be delighted if you get an invoice insurance quote for by clicking the link below – it’s a simple process and won’t take long.