Debt collection is a procedure that is part of the daily life of all businesses. However, many entrepreneurs (I have witnessed this during my consultancy assignments in collection companies) do not realize the importance of this approach for the profitability of their business.
For the arpètes, let’s do a little reminder: the claim is the right that a person (or a company) has with a debtor (natural or legal person). It is therefore nothing but a debt that the debtor must pay, after he has received a service or the delivery of goods. You should know that a debt is a debt, let’s say, “normal” because it corresponds to the gap between the provision of a service and its payment. But that debt can become unpaid when the lag gets so long that it impacts the health of the supplier’s portfolio. It is at this stage that debt collection comes into play, the procedure responsible for telling the debtor that it is time to pay his due.
The first step is to make an amicable recovery in order to avoid any litigation. After all, your buyer may have simply forgotten to pay their bill, or may not have considered your request urgent. Amicable collection then consists of sending follow-up letters, simple or by registered mail with acknowledgment of receipt.
For the most demanding clients of my former company, I didn’t hesitate to call the debtor to remind him that “who pays his debts gets richer”. I emphasize that at this stage you are not yet obliged to call a collection company or a bailiff. You can do amicable collection at your own pace. Without forgetting that, the longer the delay, the more the chances of recovering your debt decrease. Indeed, the statistics estimate at 75% the percentage of chances to recover its debt three months after the expiry. And this figure drops to 20% one year after the deadline (source here). This truthful observation has also encouraged entrepreneurs to develop software that only does debt collection (all the details on what is a provision for doubtful debt on Leblogdudirigeant).
You have done everything possible to bring the amicable procedure to a successful conclusion. Unfortunately, your debtor is stubborn: you must then initiate a request at the level of the nearest court.
Once at this stage, you have the choice between three levels of pressure to oblige the debtor to honor his debt: