A debt recovery expert at a leading Shropshire law firm is urging creditors to ensure they have comprehensive details of any debtor they have - basic steps which would ease the process should any financial problems arise in the future.

The warning comes from Debbie Ray, a debt recovery case handler at Lanyon Bowdler, who says she is seeing an increase in people who have little or no essential information about a debtor, leading to potential difficulties in pursuing the right parties should debt recovery become necessary.

“Unfortunately, this is a growing trend - people not knowing their debtor or, in many cases, not even being aware of their full name,” she said. “This not only makes it difficult to identify the right party to pursue for the outstanding debt, but also leaves potential room for a dispute over liability.

“In the absence of written correspondence to establish liability, we have to rely on surrounding evidence to try and establish this instead.

“This can be tricky in cases where, for example, an employee dealing with the matter leaves the business, instructions are being received via a third party, or any relevant paperwork is not held or lost. This results in the almost inevitable situation of incurring higher costs.

“This can be avoided however by simple good housekeeping - getting to know your customer from the outset and using a credit application form or new customer form to record all the relevant details. Ensure all the appropriate information is collated correctly and is easy to access.”

Debbie said something as simple as making sure businesses know the full legal name of their customers is vital when dealing with private individuals.

“It’s quite often the case that people are known by another name or a shortened version of that name,” she said. “And always bear in mind a potential scenario where you know two people with the same name. How could you prove that the debtor is one and not the other?

“By knowing your debtor better, thinking ahead and planning what you would do in certain situations, you will be in a more favourable position to deal with future problems when they arise.”

When dealing directly with other businesses, Debbie said it was important to understand what kind of structure they are working with - whether a limited company, partnership, limited liability partnership or sole trader.

“It’s essential to know the precise nature of what your customer’s business is as this again will be of benefit to you in any debt recovery,” she added.

“It’s a good idea to ask sole traders for their name and home address as well as their trading title, and for any customers trading as a partnership, try to get the names and addresses of all the partners of the business.

“You will probably need these details in order to pursue the sole trader or partners personally for debts incurred by the business.

“In the case of a limited company or limited liability partnership, obtain the company’s registration number. Company names can be changed, which may lead to confusion but the company registration number remains the same.

“Finally, as with any legal issues you may be unsure of, we would always advise you to seek professional advice on the steps you should take to avoid any unnecessary difficulties popping up in the future.”