Recovery refers to all the legal, amicable or judicial means used by a creditor to obtain the reimbursement of the debt or debts from his debtor. We usually talk about debt collection.
A claim is considered recoverable when it is certain, defined and payable:
Unpaid invoices can have serious consequences for your company. They can strongly affect the financial health of your company and even lead your business to bankruptcy. Did you know that unpaid invoices are responsible for more than 25% of bankruptcies?
→ Unpaid invoices generate direct costs: phone calls, reminder letters, and eventual legal proceedings. However, those consequences go far beyond.
→ Unpaid invoices jeopardize your company’s cash flow. In order to pay your own invoices, you must draw on your cash and perhaps make short-term credits that generate additional costs.
→ Unpaid invoices also prevent the development of your business. Due to lack of cash, you have to postpone your development projects. You may even need to reduce your costs in order to maintain the viability of your company.
To compensate that financial loss, you must generate a turnover significant higher than the default. In the case of an unpaid invoice of €10,000, when your profit margin is 10%, you must generate €100,000 of additional turnover to compensate the loss.
Collecting overdue invoices should be fully part of your business management. Late payment ties up your working capital, while non-payment can have a drastic effect on your profits. When an invoice becomes overdue, it is therefore vital to adopt the right attitude and maximise your chances of collecting the money you are owed.
A friendly telephone call, a formal notice and finally a registered letter, all of which remain unanswered. As an entrepreneur, outstanding invoices can have you at your wits’ end several times a year. And the collection of unpaid invoices takes a lot of time. In this case, a professional debt collection agency is just what the doctor ordered.
A professional debt collection agency can smooth over the row and consider the situation from an objective and independent standpoint. The purpose? To reconcile your interests and those of your customer.
A professional debt collection agency has collection services in many countries. She provides a professional solution to all your payment issues anywhere in the world.
A professional debt collection agency has ample experience in difficult negotiations. She presents you all the pros and cons of an amicable settlement and she always submit you a proposal before taking it to your customer.
At the end of the negotiations, the legal knowledge a professional debt collection agency has acquired culminates in a watertight document. This way there can be no new argument between you and your customer.
For a professional debt collection agency, preserving the business relationship is the No. 1 priority. She always start by solving financial disputes in mutual consultation so that you keep a good relationship with your customer.
Protecting your company has never been so important than now. Especially in this crisis period, you are never safe from the default of payment or the insolvency of one of your customers. Very often bad payments and insolvencies lead to a snowball effect. This creates risks for the cash flow and profitability of your business. A large unpaid invoice can jeopardise the growth of your business or eventually lead you to insolvency.
A trade credit insurance protects your business against the risks of defaults of payment and insolvencies of your customers:
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