Debt Collection in Consultancy

What causes unpaid invoices in consultancy?

In the consultancy sector, unpaid invoices often stem from more than simple unwillingness to pay. Payment issues may arise due to:

• Disputes about the exact value of intangible deliverables
• Scope creep leading to disagreements about tasks being complete or not
• Never-ending review processes 
• Debtors (mis)using goodwill to delay payment
• Differences in business culture when working with clients abroad

The complex nature of these situations makes recovering debts in this industry a challenging task for regular debt collection agencies.

As such, you will want to entrust the collection of your unpaid invoices to experts with in-depth legal knowledge and a deep understanding of how companies within the sector operate.

Preventing debt collection in consultancy

Because the situations leading up to debt collection in the consultancy sector are often complex, companies may wonder if there is anything they can do to protect themselves against non-payment. To answer this question, our experts have compiled 7 essential tips:

• Ensure you have a solid and detailed Statement of Work (SOW)
  Having a clear and unambiguous Statement of Work reduces your risk of getting tied up in disputes about the scope of work, specifications of your deliverables, performance targets, phases, timelines, and more. Please find more tips for drafting a Statement of Work below.
• Set clear time windows for review
  By setting specific time windows for review, you ensure that your debtors will not be able to endlessly delay payment by claiming that they are still reviewing your work.
• Establish a strict change-order process to prevent scope creep
  Clients may ask you to do extra work that goes beyond the scope that was originally agreed upon. Consultants often fulfil these additional requests in hopes of increasing client satisfaction, but doing a lot of extra work may also have the opposite effect in the long run. Performing a large number of additional tasks may lead to delays or a reduced quality of work, which might negatively affect client trust.
• Shorten payment terms in new contracts or when renegotiating existing ones
  By working with shorter payment terms, you can also improve your cash flow and limit your exposure to insolvency issues or "strategic" non-payment by your debtor.
• Add clauses about interest and debt collection fees
  By including these clauses, you can stipulate that interest will accrue on overdue invoices and that any debt collection costs incurred in recovering payment can be charged to the customer. This approach not only helps you recover additional costs but also acts as a deterrent to late or non-payment.
• Provide a clear timeframe within which any disputes must be raised
  Specify a reasonable period within which clients must raise any disputes regarding your services or invoices. Establishing such a timeframe makes it more difficult for clients who were initially satisfied with your work to later raise unfounded complaints.
• Minimise risk via security interests or retention of title
  Implementing mechanisms such as retention of title clauses or security interests (like guarantees, mortgages, charges, liens, or assignment of receivables) can help mitigate risk. These measures provide you with alternative avenues to recover outstanding amounts if a customer fails to pay.

What to do if a client still does not pay?

Even if you have done everything correctly, there is always a chance that some customers may not pay. When that happens, working with a trusted debt collection partner can help you recover what you are owed efficiently and professionally.

Why consultancy firms choose Bierens

Our firm has a long history of debt recovery in the consultancy sector, our international team of 115+ in-house lawyers and debt collection specialists is able to pursue claims strategically, ensuring our clients’ financial interests are protected efficiently and effectively.

Other reasons why consultancy firms entrust their debt collection cases to Bierens include:

• An out-of-court success rate of 95%
• No Win No Fee debt collection
• In-house expertise with national and international lawyers
• A detailed Web Portal for 24/7 tracking of your case
• Both extrajudicial and judicial debt collection

Our working method – No Win No Fee

During the extrajudicial phase, we work based on No Win No Fee. We believe it is important to try to solve the case during this phase, without court intervention. You will only have to pay €185 for administrative costs.

Should legal action be necessary, then we can help you perform a credit check and analyse your debtor’s financial status. We will discuss the costs with you and will only start working on your case after receiving your permission.

Debt collection lawyers in consultancy

We understand the payment behaviour of companies in the consultancy sector. We know how such agreements should work in theory and in practice. Therefore, we believe that it is important to provide practical advice that is as close to normal business operations as possible. For instance, we look at your operations and see how we can build in checks and balances. In addition, we also ensure that these checks and balances are implemented and executed in the right way.

Our specialists are ready to recover

For decades, Bierens has helped many companies across different industry sectors. Our team of debt collection lawyers also specialise in international debt collection. Whether you have a debt collection case in your own country or abroad, our lawyers have the expertise and knowledge to help you.

So do you operate in the consultancy sector and has your client left your invoice unpaid? Then send us your invoice right away. Our specialists will immediately start working on your case.