When to refer a client's debt
Spot the moment an overdue account stops being a chase-up and becomes a recovery job.
What this play helps you do
- Recognise the practical signals that an account has moved beyond friendly reminders
- Use a simple age and behaviour test before raising recovery with a client
- Understand why earlier referral usually protects more of the money owed
- Keep your role as the trusted adviser while the recovery work sits with Merion
- Know how to open the conversation without alarming the client
6 min
When to run this
Most overdue invoices are simply late, not lost. The skill is knowing when an account has crossed from slow payer to genuine recovery risk. As the adviser closest to your client's books, you often see the warning signs first.
Run this play when one or more of the following is true:
- The invoice is well past terms and two or three reminders have gone unanswered.
- The debtor has stopped returning calls or emails, or keeps making promises that never land.
- The amount is material enough that writing it off would hurt the client's cash position.
- The client is spending hours chasing payment instead of running their business.
None of these on their own means the money is gone. Together, they mean it is time for a calm, professional conversation about recovery.
How it works
Referring early is not aggressive — it is prudent. The longer a commercial debt stays unpaid, the harder it usually is to collect: contact details go stale, the debtor's finances can deteriorate, and goodwill fades on both sides.
A useful rule of thumb is the 30/60/90 test:
- At 30 days overdue, the account is simply late. Keep your normal reminder process running.
- At 60 days, look for the behavioural signals above. If they are present, flag the account for a recovery conversation.
- At 90 days, an unresponsive debtor is a strong candidate to refer. Acting now protects more of the balance than waiting another quarter.
What to tell the client
Frame referral as a routine step, not a last resort. You might say: 'This account has aged past the point where reminders are working. I'd suggest we have a specialist commercial recovery firm look at it — there is no cost to do so, and it frees you up to focus on the business.'
Reassure them that they stay in control: nothing happens without their say-so, the work is handled professionally and confidentially, and Merion works on a commission-only, no-recovery-no-fee basis, so there is no fee unless money is actually collected.
What happens next
Once the client agrees, you simply pass the debt to Merion using the refer a debt form. Merion reviews the matter, contacts the debtor on the client's behalf and keeps you informed. You remain the relationship owner throughout — the recovery specialists do the chasing, not you.
If you are unsure whether an account is worth pursuing, a free debt appraisal gives you and your client a no-obligation read before deciding.
Key takeaways
- Late is normal; unresponsive plus material plus aged is a referral signal.
- Earlier referral generally recovers more of the balance than waiting.
- Position referral as a prudent, no-cost step — the client stays in control.
FAQ
Is there a minimum age before I can refer a debt?
There is no hard cut-off, but accounts that are unresponsive and 60 to 90 days past terms are usually the strongest candidates. A free appraisal can confirm whether it is worth pursuing.
Will referring damage my client's relationship with the debtor?
Recovery is handled professionally and commercially. In most cases the debtor simply pays once a specialist is involved, and the trading relationship can continue if both sides wish.
What if the client wants to keep trying themselves?
That is their call. You can flag the account, set a review date, and refer later if reminders still go nowhere. Nothing is locked in by raising the conversation.
Run the play — we'll handle recovery
Commission-only recovery your clients can trust. No recovery, no fee.