The best debt collection tips for entrepreneurs - TIP: download our FREE e-book!
The best debt collection tips for entrepreneurs
Do you have outstanding invoices with your customers? Although you usually agree on a payment term with your customers, not every customer strictly adheres to this term. Almost every entrepreneur therefore has to deal with outstanding invoices. From our collection practice we know that acting fast works best. By taking quick action, you have the best chance that an invoice will still be paid.
But what is the best thing to do if you are dealing with outstanding invoices? It is usually not advisable to call in a collection agency or lawyer directly. Although you can usually transfer an expired invoice directly for collection, it is better to first try to get the claim paid yourself. In addition to paying the invoices, this also contributes to maintaining your customer relationship.
1. Send a payment reminder
Has the payment date on your invoice expired? Then you need to send a friendly payment reminder to your customer. There may be many reasons why your invoice has not yet been paid. Your customer may have simply overlooked the invoice. In the first instance, you should try not to assume the worst. Initially, you should approach your customer in a friendly way.
Read more information about setting up and sending a payment reminder.
2. Call your customer
Has the payment reminder been ineffective? Is your invoice still outstanding? You should call your customer. Personal contact with customers is always good, it can help to find out why the payment has not yet been made. During a phone call, it often becomes clear what the reason is for non-payment. Moreover, your customer is unable to say they have never received the invoice.
Many organisations skip this step because they are reluctant to call debtors; it’s awkward and uncomfortable. For our debt collection specialists however, this is a daily exercise. That is why they have happily provided a number of tips to help with calling debtors in chapter 3.
One of these tips is that you have to take into account excuses. Some debtors are not (yet) planning to pay and will shower you with excuses. It is important that you are prepared for this. That is why we have provided the 15 most common debtor excuses and explain how you can best respond to them.
Read more about the most common debtor excuses.
3. Sending a final reminder
If you have called your customer and made clear payment agreements, you can assume that they will be met. If payment is still not made, it is advisable to send a final reminder. Here you are more formal and let your customer know that this is their last chance to pay. In this letter, you inform your customer that if there is no payment, you will hand over the claim to a debt collection specialist. The extra costs will be charged to your customer.
Read all about sending final payment reminders.
4. Making payment arrangements
During the debt collection process, you may find that your client does not (currently) have the financial means to pay the invoice. In this case, you may find your debtor asks if they can make a payment arrangement with you. This gives your customer a little more breathing space and means they can still pay your invoice. You are not obliged to agree on this should the terms not financially work for you.
More information about making a payment arrangement.
Call in a debt recovery agency or lawyer
If after having sent a payment reminder, made a phone call and even a final reminder you still have not received payment, it is advisable to call upon the expertise of a debt recovery agency or a debt recovery lawyer. Of course, the choice is yours to wait longer, but this usually does not have the desired effect.
The advantages of a Bierens Debt Recovery Lawyer
- Succesfully recovering debt since 1952
- Always honest and clear advice
- Specialist laywers in international debt recovery
- Every year we collect thousands of outstanding invoices
Practice what you preach
You already sent the final reminder in which you indicated that you would transfer the case if no payment was made. If you don't act now, your debtor will stop taking your warnings seriously. If this is the case, it's best to immediately call in an external debt recovery specialist to help you collect your claim.
Do not wait to long
In addition, we advise call in the help of an external debt recovery specialist to ensure that the collection process doesn't take too long. We know by experience; the older the claim, the harder it becomes to collect. As time goes by the debts of a party often only increase, which decreases the chance of your outstanding invoice getting paid.
Limitation period of an invoice
Finally, an invoice may become time-barred if you wait too long to collect. You cannot collect an outstanding invoice forever as it has an expiration date. Once this date has expired, you can no longer collect the invoice through court. Therefore it's important to prevent this from happening. Don't leave invoices open for too long.
Send us your case before 16:00pm and we'll get to work immediately!
Specialists in International Debt Collection
Our 35 international lawyers are specialists in debt collection across Europe. From the moment that you hand your case over to us, we will do our utmost to resolve the matter as soon as possible. Whether this concerns a straightforward debt recovery matter or a complicated legal conflict, we will unburden you.
Want to know more about international debt collection?
You can find more comprehensive information about international debt collection in our knowledge bank.
Still in need of some advice? Contact us today. Our international debt collection specialists and lawyers will be happy to help.