Proof of Debt – The Paper Trail

Many of the cases that are submitted to our collections department lack any real evidence of the suggested debt in the first instance.

We are frequently bombarded with cases that have only the briefest paper trail of:

• An email confirming the order but not the details of.
• An Invoice that has been submitted and later rebuffed
• A number of emails detailing why the debtor is not going to pay

Consequently this weakens the case when attempting to recover the monies and forces us to apply to the courts in order to hopefully pass judgment. Of course for the creditor to be successful in court we have to hope that the judge understands the parameters of the case and subsequently finds judgement in their favour, which with a lack of evidence is not always guaranteed.

One of the reasons that we developed the ICE PACC was in order to promote due diligence by establishing an auditable paper trail and thereby ensuring that detailed order forms are signed by authorised representatives and that those signatures confirm the receipt of goods or services and are satisfied with the provision.

This, coupled with comprehensive terms, allows the creditor to demonstrate at court that the debtor requested the order and was satisfied with the end product.

In the event that a part of this process is skipped, it potentially allows the debtor to raise a dispute and thus justify the non payment of the invoice.

Additionally a dispute means that a statutory demand can not be considered to be effectively and legally served and therefore we have to obtain judgement first, incurring considerable time delays waiting for the legal process to complete. Quite often small businesses will not go down this avenue due to lack of funds or confidence in securing judgement and as a result are compelled to, reluctantly, write the debt off.

Business owners often tell me that whilst they can see the benefit of a comprehensive credit control policy, they don’t have either the time or resources to create one or that their industry is such that, terms, delivery notes and order confirmation are not common practice and that such action will lead to a loss in sales.

I reply with asking them to lend me £5,000.00 and when they look at me in astonishment I suggest that at the moment they are, essentially, lending businesses owners, who they don’t necessarily know, large sums of money in the form of credit in the hope that they will eventually pay with no real paper trail.

Ultimately if you are going to offer credit in the form of invoicing you need a paper trail that will demonstrate that the debtor owes the outstanding amount without dispute.

If you are looking for a online collections system that promotes Pro Active Credit Control and incorporates FREE pre legal recovery then subscribe to the ICE PACC.