Getting Back door cases paid can frequently be difficult, particularly since invoice financers and their related insurance policies do not cover such instances. Our partner, Sterling Debt Recovery has developed a niche assisting recruitment consultancies in collecting bad debts and offer advice to ensure you have the best chance of getting paid.
Recruitment consultancies are uncovering growing numbers of back door cases with the market becoming wise to the potential for loss of revenue, recruitments consultants improving their processes to uncover the events, and now service providers specialising in discovery. Once the cases are discovered it’s very common for the debtor to dispute the fee, with the most common excuses being ‘we didn’t sign your terms of business’ or ‘we received the candidate’s cv via another channel’.
There are actions you can take to improve the chances of collecting:
• Ensure that your terms and conditions are optimised and up-to-date with relevant legislation and case law (Lawspeed is an excellent source for tob’s).
• Ensure that your terms of business are sent out with every CV, either as a pdf or link with a clear reference to the terms in the body of the e-mail (e.g. “Please find attached the CV of a candidate and the applicable terms of business”).
• Get e-mail confirmation from the candidate to prove that they have had contact with you regarding the relevant vacancy.
• If collecting evidence of the appointment online (e.g. via Linkedin), be sure to take screen-prints in case the candidate deletes the data at a later date. Get additional proof if possible (e.g. an e-mail from the candidate confirming engagement).
• Do not automatically assume that the client is deliberately attempting to get out of paying the commission. Write a professional and courteous letter assuming there has been an oversight or a misunderstanding e.g. of the rebate terms. You may wish to delay the actual invoice until the client responds, and decide whether or not to add additional fees permitted under your terms of business depending on the response.
• If the client refuses to make payment then don’t be afraid to engage a Collection Agency with specific expertise in the Recruitment Sector. Like Recruitment Consultancies, some Collection Agencies specialise in distinct business sectors. Choose an agency with proven experience in the Recruitment Sector that knows the law and will work in a professional manner to protect your reputation.
When faced with a disputed debt, or simple failure to pay then there are various options for the agency. You can submit a claim yourself using moneyclaim (if under £10k), which is cost effective but the process can get complicated if the claim is defended, and end up in failure if you do not have legal expertise, particularly if the debtor instructs a solicitor. You can instruct a solicitor yourself and incur the costs which can mount up quickly in defended cases. With any legal action there is always risk of throwing good money after bad, with proceedings being time consuming and unpredictable.
Sterling Debt Recovery specialise in getting Recruitment debts paid. We understand the market, the terms of business, the usual disputes and critically, how to persuade the debtor that they are on the wrong side of the terms and better off resolving the matter without the need for legal proceedings. Sterling work on a no-collect, no-fee basis with no up-front costs, so there is no risk of throwing good money after bad. They work on cases as low as £500 upwards and have legal expertise in house if required.
One of Sterling’s clients explains the value of their service well in the following comment:
“Although we use credit insurance, not all of our debts are covered, in particular we have difficulty with back-door cases. We have used other debt collection agencies in the past but they were not able to resolve disputes and in most cases simply tried to pass our case on to a solicitor to lodge a claim. Sterling have been different. As Sterling’s debt collectors and their solicitor have considerable expertise in the Recruitment sector they have been able to negotiate successfully with our debtors, resolving disputes and explaining their liability to them. In all but a few cases Sterling have been able to collect the debt without taking legal action, and sometimes they are able to collect late fees to cover their charge to us. Where legal action has been necessary Sterling have used the solicitor based in their office. This has made the process easier for us and his rates are extremely good. I’m always confident that he is doing his best to get us the best result in each case.”
If this article has raised any issues for your business which you would like to discuss further, please call Sterling Debt Recovery on 0207 100 5978 or send an email with reference to this article to firstname.lastname@example.org