Helping Recruitment Companies collect unpaid invoices

1. Introduction

Debt recovery is a growing challenge for recruitment companies across England and Wales. Whether you place temporary workers, contractors, or permanent staff, the risk of unpaid invoices can have a serious impact on your agency’s cash flow and stability.

At Francis Wilks & Jones, we understand the unique pressures that recruitment businesses face when chasing overdue fees. The sector is fast-moving, highly competitive, and often reliant on tight payment cycles. A single large unpaid invoice or a string of late payments can quickly disrupt operations and growth plans.

• We have been helping recruitment companies recover unpaid fees since 2002, successfully recovering millions of pounds for our clients.
• Our team also acts for a wide range of invoice discounters and factoring companies, many of whom work closely with recruitment businesses. This gives us a unique in-depth knowledge of both the recruitment sector and the funding arrangements that often sit behind it.

This guide is designed to help recruitment company owners, directors, and finance teams understand the key issues involved in debt recovery. It explains common problems, outlines legal options, and provides practical advice on how to recover money owed while maintaining client relationships where possible.

Whether you’re dealing with backdoor hires, clients disputing placement fees, or persistent late payers, our specialist team is here to support you every step of the way.

2. Common debt recovery challenges for recruitment agencies

Recruitment companies face a number of sector-specific issues that make debt recovery more complex than in many other industries. These challenges can lead to delayed payments, disputes, or complete non-payment — all of which can harm cash flow and create operational strain.

Below are some of the most common issues we see:

3. Legal and commercial framework recruitment agencies must navigate

Recruitment companies operate in a highly regulated environment. While debt recovery itself falls under general commercial and civil law, several pieces of legislation govern how agencies interact with clients and candidates. Understanding these rules — even at a high level — can help ensure your contracts are enforceable and reduce the risk of payment disputes.

Here are some of the key legal and regulatory frameworks that apply to the sector:

While most of these laws don’t govern debt recovery directly, they often influence the strength of your contractual position or the nature of any dispute. In the next section, we’ll look at how strong contracts and good internal processes can prevent problems before they begin.

4. How to prevent debt issues before they arise

Prevention is always better than cure — especially when it comes to unpaid invoices. Recruitment companies that take a proactive approach to credit control and contract management significantly reduce the risk of disputes and write-offs.

Below are key steps to help prevent debt issues from arising in the first place:

Strong processes, combined with expert legal support when needed, can drastically improve your agency’s recovery rate and cash flow stability. In the next section, we’ll explain what happens when internal efforts fail and legal recovery becomes necessary.

5. Step-by-step debt recovery process for recruitment agencies

When internal efforts to secure payment fail, taking formal recovery steps becomes necessary. The right approach depends on the size of the debt, the client’s attitude, and the urgency of recovery. Below is a step-by-step outline of how a typical legal debt recovery process works.

Step 1: internal credit control and reminders

Before escalating to legal action, ensure you’ve issued polite but firm payment reminders. These should follow a clear schedule and escalate in tone. Always document every communication.

Step 2: letter before action (LBA)

This is a formal legal letter informing the debtor that payment must be made within a specific timeframe (usually 7–14 days) or legal action will follow. A well-drafted Letter Before Action from a solicitor often prompts payment without further steps.

Step 3: engaging a specialist solicitor

If the debt remains unpaid, instructing a law firm with recruitment sector experience can make a significant difference. At Francis Wilks & Jones, we understand the unique fee structures and disputes that arise in recruitment — and tailor our approach accordingly.

Step 4: issuing court proceedings

You can issue a claim in the County Court or, for higher-value debts, the High Court. This can lead to a County Court Judgment (CCJ), which is legally enforceable.

Alternatively you can pursue more hard hitting recovery routes – something we prefer to do for clients where we can. These include

✅ Statutory demands. These can be excellent help prompt payment

✅Winding up petitions. Again, used correctly, these can be invaluable in getting paid quickly, often with all your legal costs being paid by the debtor as well.

Step 5: alternative enforcement options

If you have gone down the county court route and obtained a judgment, there are various enforcement routes we can help you with:

✅ High Court enforcement officers – for debts over £600

✅Third party debt orders – freeze funds in the debtor’s bank

✅Charging orders – secure the debt against the debtor’s property

✅Statutory demands – giving 18 days for the debt to be paid

✅Winding-up petitions – a strong option for corporate debts over £750 where the debtor is refusing to pay

6. Special issues in the recruitment sector

Debt recovery for recruitment companies often involves unique industry challenges. These can complicate or delay standard recovery action and require specialist advice to navigate effectively.

Backdoor hires

A client hires a candidate without notifying the agency — often after a delay or through another company within the group. These cases rely heavily on evidence, such as email trails, original introductions, and candidate confirmations. Legal recovery is possible, but fast action is essential.

Temporary placements and timesheet disputes

Many disputes arise from disagreements over hours worked or unapproved timesheets. Whilst agencies should have clear systems for getting timesheets signed or digitally approved in real-time to avoid these issues, we appreciate that this is not always the case. Bu even so, we can still help you get paid in full.

Fee clawbacks and rebate periods

Clients may try to reclaim fees if a candidate leaves early or doesn’t work out. Ideally your terms should define when a rebate applies and whether any conditions (like prompt payment) must be met.

International placements

When placing candidates overseas or with clients based abroad, recovery can involve complex jurisdictional issues. Legal strategy must be tailored depending on where the debtor is based and what legal agreements were in place.

Insolvency of end clients

With rising insolvency rates across sectors, recruitment agencies are often left unpaid when clients go under. If you act quickly, it’s sometimes possible to secure a priority payment or make a claim through the insolvency process. At FWJ we have our own dedicated insolvency team and they can often help even when the situation looks impossible.

Payment chain issues with umbrella companies or managed service providers

Where intermediaries are involved, identifying the right party to pursue — and understanding who holds the contractual liability — is crucial. Contracts should clearly set out payment responsibilities.

7. What our clients say

We’ve helped many recruitment companies over the years (and their funders) recover unpaid debts quickly, efficiently, and cost-effectively. Here’s what some of our clients have said:

“As credit and collection professionals ourselves, we have to be pretty discerning about the lawyers we retain… Francis Wilks & Jones have been our retained solicitors for many years now.”

The Credit Protection Association

“FWJ have been helping us with volume debt recovery for five years now and we’ve been really impressed.”

Jason Foran, Rightside Financial Services

“FWJ have been our go-to debt recovery lawyers for almost two years now. They are organised, easy to work with and very effective.”

Credit Management Client

8. Why choose Francis Wilks & Jones?

We’re not just legal experts — we’re debt recovery specialists with over 20 years of experience helping recruitment companies and their funders recover what they’re owed.

✔ Proven track record: millions of pounds recovered since 2002

✔ Sector expertise: deep understanding of how recruitment agencies operate

✔ Fast and effective: we act quickly and decisively

✔ Flexible pricing: fixed fees or no-win, no-fee options available

✔ Full legal support: from reminder letters to court proceedings and enforcement

Whether you need one-off advice or long-term support, we’re here to help you take control of your unpaid invoices and protect your business.

9. Get help today

If your recruitment company is struggling to recover unpaid invoices — or wants to improve its recovery process — we’re ready to help.

📞 Call us: 020 7841 0390
📝 Online enquiry form

We offer a free, no-obligation initial discussion to understand your situation and recommend the best way forward.

Don’t let unpaid fees hold your business back. Contact Francis Wilks & Jones today and recover what you’re owed — with confidence.

We used Francis Wilks & Jones to recover outstanding invoices. Andy and Hardeep worked quickly to get all the legal documents sent out. We recovered all the outstanding invoices and the legal costs, this essentially put us at net-zero in terms of costs which was great. They were also able to recover late payment interest and late payment compensation for us as well.

A private client we assisted with an issue recovering their debts