Unpaid and late payments are an integral part of the life of a business. Unfortunately, these situations can jeopardize your cash flow. This is why the collection of unpaid debts must have a major place in the management of the company. To avoid serious consequences, it is essential to adopt the right attitude and use the right techniques. But in concrete terms, how does the collection of unpaid debts take place? What are the steps you need to go through? And above all, who can you call on to support you, in order to maximize your chances of recovering the amounts due?
A debt is a sum owed by a debtor to his creditor. The debtor and the creditor can be, in this case, a natural or legal person. The payment of this claim is defined in advance by the two parties. In case of delay (based on the terms of the contract), the sum then becomes unpaid. This is where the debt collection procedure comes in.
Activity governed and framed by law, debt collection consists of using different techniques to obtain payment of the amount of money due. Depending on the case, there are several types of receivables: tax receivables for taxes, civil receivables which concern two individuals and commercial receivables for companies.
According to the law: every customer must pay a debt before the due date specified in the contract or on the invoice. When then should debt collection be initiated? Generally, the creditor goes through several stages, including reminders and exchanges with the debtor. If despite reminders, the amount remains unpaid, on an agreed date, it is possible to start the collection process.
Whether you want to go through financial advisers, collection companies or not, debt collection goes through two stages: amicable collection and judicial collection.
Do you want to start debt collection procedures? This process generally starts with amicable negotiation. As you will have understood from its name, this process consists of chasing the debtor. The objective is to recall the existence of the debt, to make it clear that the payment date has passed and that the payment of the invoice must be made as soon as possible. This process is entirely amicable. The most used techniques are: telephone calls, reminders of invoices by email, visits to the collection company, etc.
After the amicable appeal, the creditor has still not received the amount due? He can, in this case, move on to the next step: judicial recovery. This step requires the intervention of a professional. In particular a collection firm. Here are the different steps he will take: