Commercial debt collection: Secure your global payments

Debt collection is a step a creditor takes to make a debtor settle their debt.

Businesses can recover unpaid debts through several approaches depending on the situation. The process often begins with payment reminders and direct communication with the customer. If the payment remains outstanding, formal demand letters, negotiated repayment plans, mediation, or professional debt collection services may be required. In certain cases, legal proceedings can be considered as a final step to recover the debt.
 

The first thing to do is to remind your client about the due dates and then send further reminders about unpaid invoices. If they fail to respond, you can send a formal notice to pay. State that you are prepared to start legal proceedings (ideally by registered mail with acknowledgment of receipt) if the invoices are not settled within the deadline you set with additional penalties for late payment.

If your invoice has still not been paid, there are legal solutions, such as a court order.

While an amicable process simply encourages your client to pay an invoice, legal redress obliges them to comply.  You can follow various procedures, including:  

• A court order to pay, which is very easily attained. This judicial remedy is more relevant to small claims where the debtor does not dispute the invoice. You can call on a bailiff to take action to seek payment of the outstanding invoices. 
• Summary procedure: you are required to prove that the invoice is actually pending payment in order to use this procedure. 
• Summons for payment: this procedure, which results in a trial, is more expensive and time-consuming, but is ideal for large companies and more serious disputes.

Late or non-payment means there is less liquidity in your cash flow: this can hamper your ability to grow or lead to cash-flow problems that affect your firm’s sustainability.
Devoting time and energy to trying to get your customers to pay means there’s less time to focus on your future contracts and growing your business. When Coface handles your business debt collection, you collect your outstanding invoices quickly - leaving you free to concentrate on future development.

Coface begins by assessing your overdue account and contacting the debtor using professional, locally compliant collection practices. Our debt collection specialists work to negotiate payment, resolve disputes where possible, and recover outstanding invoices efficiently. If an amicable solution cannot be reached, we can recommend appropriate legal recovery options through our global network, keeping you informed throughout the process.

To ensure your company stays in good health, it is vital that the process for collecting unpaid invoices does not exceed the limitation period. When this is the case, legal redress might end up being impossible.
The limitation period for receivables when the debtor is a business (i.e. not an individual) is 5 years. The older the debt, the less chance there is that the debt collection process will get results. To have the best chance of success, get in touch with our experts: they know the most effective ways to recover your unpaid invoices quickly so you can maintain good business relations with your client. 

Various procedures are possible, and they are explained in detail on this page. Extending the payment period, however, and any delay in calling in a debt collection agency, may mean you will never recover your money.