Payment arrangement

Tip 1: have your client propose a payment arrangement

Make sure that your client proposes a new payment arrangement if the invoice cannot be paid in one go. This way your debtor acknowledges the claim and shows a serious commitment to fulfil the payment.

Tip 2: ensure that the payment arrangement is feasible within your organization

Once you agree to a new payment arrangement, it is important to realize that this will cause a delay in receiving your payment. This will also involve more administrative costs, as well as additional interest fees. For example, it could be possible that you will have to pay the delivery charges until the buyer is expected to pay according to the new payment arrangement. Therefore, it is important to ensure that the payment arrangement is feasible for your business operations.

Tip 3: check the creditworthiness of your customer

Before agreeing to a payment arrangement, we advise you to check the creditworthiness of your customer. If you already know that your business partner has weak creditworthiness, then a payment arrangement may not be the best solution. Assessing your creditor's feasibility of paying the outstanding invoice is also advised.

Tip 4: make the payment arrangement as concrete as possible

Ensure that clear and concrete agreement are made for both parties. The following should always be included in a payment reminder.

1. What is the amount that should be paid?
2. How many instalments should you agree upon and by which dates? Our advice is to ensure that the payment arrangement is as short as possible. Made use of few instalments, since, the longer the payment arrangement, the greater the risk that your debtor will not comply.
3. What interest is charged on the payment term? Interest can be included in the payment arrangement provided this has been stated in your terms and condition. However, it is important to consider that your customer is already experiencing difficulties in repaying the amount. Adding additional costs could make it more difficult for your customer to pay.
4. What are the consequences of non-payment? Ensure that if your customer fails to adhere to the payment arrangement, the entire invoice will have to be paid immediately. This could mean that legal action will be taken.

Tip 5: record the payment arrangement in writing

Ensure a written confirmation of the payment arrangement by your debtor. This will prevent any issues about the payment terms at a later stage. For large payments, the payment arrangement can be recorded in a notarial deed.

Tip 6: follow up on the payment arrangement

It is important to ensure that the new payment arrangements are complied with. If the payment is not made on time, then take immediate action. This way you prevent the delay from escalating.

Tip 7: Hire a debt collection lawyer

If your debtor still fails to adhere to the payment arrangement, then it is advised to involve a third party who can collect your debt on your behalf. Since our debt collection lawyers have more resources than a regular debt collection agency, we have the knowledge and experience to retrieve your payment.

Payment arrangement template

A payment arrangement often has a specific format that must be adhered to. In most cases, a payment arrangement will have to be drafted according to your specific case. Or debt collection specialists and lawyers can assist you in drafting a payment arrangement according to your needs. Moreover, our lawyers can provide sound and honest advice.