Debt collected in Dubai on behalf of a FTSE 250 Company
The pandemic had a significant impact on international trade with an estimated 8.9% decline in trade according to the Bank of England. As pandemic restrictions ease, international trade has started to increase. This is extremely important for the growth of companies. However, it is not without risk and non-paying customers present a significant challenge to companies.
Doing business with customers around the world can create more opportunities, open up new markets, and create significant business growth. However, operating in more uncharted territories, particularly with customers you have never met before face to face, can make it more difficult to ensure timely payment. Not only will your customers be in different time zones but also they are likely to work to different laws and businesses customs especially when it comes to debt and payment. Guildways international debt collection team sees the many challenges businesses face when chasing late payments from overseas customers.
A recent example involved a FTSE 250 company that was chasing a debt from a customer based in Dubai. Despite numerous attempts from their in-house credit control team, the FTSE 250 company was unable to secure payment of their debt. This is not uncommon as Euler Hermes rate Saudi Arabia, UAE, Malaysia and China as the most complex countries for debt collection.
The FTSE 250 company considered writing off the debt before enlisting the help of our specialist debt collection team. In 2020, UK businesses faced writing off £1.86 billion in bad debt.
To give the best chance of collecting the debt, the team often research the history of the debt and gather information about the customer. For debts in the UAE, it is important to obtain as much information on the customer because insolvent debtors may be sentenced to a prison term and as a result they have a tendency to disappear to avoid such repercussions. In this matter, key personnel who may be in a position to authorise payment were identified and contacted accordingly.
It was established that there were administrative issues relating to the format of the client’s invoice which was preventing payment. The collections team were able to work with all parties to resolve this issue and payment in full was secured.
When a customer based overseas owes you money, one of the key concerns for businesses and organisations is that they may need to write the money off as a bad debt. As seen above, the FTSE 250 company managed to avoid writing off a substantial debt because our international debt collection service gave them the confidence to pursue their matter on a risk free, No Collection-No Fee commission basis. This means if successful we charge a percentage commission but if we are unsuccessful, our clients pay nothing.
25 Oct 2021