A bad debt — a customer who simply cannot pay — is one of the most demoralising hits a business takes. Recovering means dealing with both the cash gap and the lessons.
Deal with the immediate gap
Assess the cash-flow hole the write-off leaves and act quickly: chase other debtors, trim costs, and arrange short-term support where the gap is a timing issue rather than a permanent loss.
Claim what you can
Register as a creditor if the customer is in an insolvency process, and check whether the VAT on the bad debt can be reclaimed. Small recoveries still help.
Reduce the next one
Tighten credit control: check new customers, set sensible credit limits, invoice promptly and chase consistently. Consider credit insurance for large exposures. A bad debt is painful; a repeat is avoidable.
If the write-off causes a temporary gap, talk to us about a short arrangement.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Chasing late-paying customers to ease cashflow, Getting your company back on track after arrears, How to read your own early-warning signs.