Businesses in the UK are increasingly suffering delays to payments from overseas customers and suppliers, according to a leading debt recovery law firm.
Lovetts Plc has reported a 19% increase in demand for overseas 'letters before action' since July 2009, reflecting a surge in overseas customers defaulting on due payments.
Trevor Philips, director of sales and marketing for Lovetts, says: “We have seen the demand for our overseas debt recovery services grow significantly. In the past year alone, the number of letters before action being issued on behalf of UK businesses to foreign debtors has increased by 19%. The average value of the debt being chased is in excess of £5,000 so is by no means insignificant.”
The challenge for exporters, say Lovetts, is to ensure rigorous processes are in place to tackle late payment when the debtor may be on the other side of the world and operates in a completely different language.
“The best strategy for any contract with an overseas business is to ensure you do the groundwork first – know who you are dealing with by using credit and identity checks - and agree the terms and conditions of payment leaving no room for miscommunication through language difficulties. With the bases covered you can focus with confidence on getting business done.”
