Debt collection: trust and responsiveness

Debt collection: preserving the customer relationship

Preserving the customer relationship is essential in order to be able, in addition to recovering one's money, to maintain good commercial relations with the debtor, who may turn out to be a long-standing partner. Prudence, therefore, and anticipation, especially in the research of solvency of future customers. Of course, an iron fist covered by a velvet glove will always prevail at some point in order to get paid and to reinforce one's credibility on the market.

Survey and trust

Debt collection involves constraints that should be controlled as much as possible. First of all, the solvency of the debtor. A strategy that limits the customer risk and at the same time prevents late payments. This research of solvency is always necessary, in order to avoid the important costs of a litigation if the debtor company is moribund or on the verge of the suspension of payments. In the same way, the knowledge of the solvency of its customer makes it possible to negotiate a schedule of payments in full knowledge of the facts.

Receivables should not be forgotten

It is recommended to act before the due date of the invoice in order to identify possible disputes, to deal with them and thus to optimize the payments at the right date. This avoids legal proceedings. The reactivity in the reminders is a guarantee of good management of the company. In the event of a dispute, immediate treatment allows to consolidate the relationship of trust. Receivables do not age well for several reasons, in particular the risk of prescription, loss of information on invoice receipts, the risk of insolvency, difficulty in locating a debtor, etc.

The importance of responsiveness

To recover debts, reactivity must always be a priority. The faster the intervention, the easier it is to find solutions and the higher the chances of recovery. On average, a debt that has been unpaid for less than two months is recovered in 85% of cases, whereas for a debt that has been unpaid for more than a year, the percentage falls below 30%... The faster the intervention, the higher the chances of recovery.

Online debt collection, a time-saver for small and medium-sized businesses

Numerous online collection solutions have emerged in recent years, primarily for small claims and reserved for SMEs and VSEs that do not master the mechanics of debt collection. This is a growing market because these companies have long been forgotten by traditional collection agencies. Indeed, their pricing method (minimum billing too high) and their methodology are too aggressive.

In 2017, in France, approximately 56 Billion Euros of receivables remained unpaid.
More than one out of four insolvency proceedings is related to problems of unpaid and late payments.
16,000 business failures (out of 63,000) are due to non-payment.

Source: ANCR (National Union of Debt Collection and Business Intelligence Firms), 2018 study.