“It’s the principle, Ron!”
I’ve heard those words more times than I can count over the past two decades. And while I understand the frustration of being owed money, my response is usually the same:
Yes, but at what cost?
When it comes to pursuing a business debt, it’s important to consider whether the time, money and effort involved will actually lead to a successful recovery.
When Pursuing a Business Debt Costs More Than It’s Worth
A few years ago, I was instructed by a chartered surveyor who was owed more than £10,000.
He had been working with a large organisation managing retail units, but the company repeatedly changed his points of contact, leaving his invoices unpaid.
Understandably, he was frustrated and wanted to take legal action.
However, after reviewing the debtor’s financial position, it became apparent that the company was experiencing financial difficulties.
Although legal proceedings were an option worth considering, there was a real risk that my client could spend more money pursuing the debt without recovering what he was owed.
Look at the Likelihood of Recovery Before Taking Action
It’s natural to want to pursue a debt on principle, particularly when you feel you’ve been treated unfairly.
But taking someone to court doesn’t automatically mean you’ll get paid.
Before proceeding, consider the debtor’s financial position, the amount outstanding, the likely costs of recovery and whether there is a realistic prospect of receiving payment.
Sometimes the most sensible commercial decision is not the most emotionally satisfying one.
Need Help Deciding Whether a Debt Is Worth Pursuing?
At Talk to Ron, I help business owners assess outstanding debts and explore practical, cost-effective recovery options.
If you’re unsure whether pursuing an unpaid invoice is worth the expense, get in touch for a no-obligation, thirty-minute conversation.
Sometimes knowing when not to spend more money is just as valuable as knowing when to take action.