Debt Recovery: Why a Letter Before Action Is So Effective
Businesses often wonder how effective a Letter Before Action (LBA) actually is compared to sending their own warning letters to their debtors. After reading this guide you will uncover the true reasons as to why LBAs are so effective
Proof is in the numbers
Lovetts analysed the success rate of the Letters Before Action it has issued on behalf of clients over the past year and found that 86%* of cases settle at the letter before action stage. Despite this, businesses are still reluctant to take action against late payers. We have found that on average, businesses are waiting 64 days from the date the invoice is due before sending a letter before action. This is due to the attempt to maintain business relationships and services. By instructing a debt recovery solicitor to send a Letter Before Action, you will be saving alot of time and money which could be used to further your business.
Its Less Hassle
Sending emails, faxes, invoices, contacting every director; sound familiar? A lot of business know the stress chasing a debt will do to a company. It leads to contempt and anger towards the debtor which could affect morale. By instructing a solicitor to write an Letter Before Action on your behalf, it elevates hassle on your part because it leaves you to carry on with your business knowing that your debt is being recovered at a small fee. We see it as a quick and easy service for you to maintain your business relationship with your debtor but still recover the money you’re owed legally..
It invokes action
If you have chased a debt before chances are you are aware of the trouble of getting responses. We have encountered businesses who have waited months to receive payment from late invoices or have debtors that alleviate from the payment plans setup. This is why we implemented a Letter Before Action Template in place for clients who are having trouble getting payment on time. In some cases we have found that debtors intentionally wait until they receive an LBA from solicitors before they make payment thus invoking them to take action. This shows how our service is respected within business practices
If payment still isn’t forthcoming, you can get tougher by laying out a set date by which payment must be made otherwise legal action may be the result. Usually, payment within seven days is a more than reasonable demand, giving the client time to read the letter and act upon it.