A default of payment means an invoice that has not been paid on time by a debtor. An invoice is therefore considered unpaid when the amount of this invoice has not been paid on the payment date indicated on the invoice.
There are many reasons why an invoice has not been paid on time: forgetfulness, bad faith, commercial litigation but also insolvency or bankruptcy of the debtor.
Today, companies have to deal with more and more unpaid invoices. React quickly and appropriately is essential.
Alarm systems are digital tools that keep track of your incoming and outgoing invoices. Do not use this reminder system for when it is too late: set an alert a few days before the due date.
The same goes for your communication towards customers: there is no need to wait until the deadline has expired. On the contrary, a little forget-me-not before the due date is more sympathetic than a first formal notice once the deadline is past. Moreover, this increases your chances of being paid.
If no payment is forthcoming, you should react as quickly as possible. Discuss the matter with your customer and try to agree on a solution. To maintain a good commercial relationship with your customer, an amicable settlement is often the way to go.
If the water between you and your customer has become too deep, a professional debt collection agency can assist you. A debt collection service makes an objective assessment and has plenty of experience with difficult negotiations.
Take out a trade credit insurance to minimize the losses from defaults of payment.
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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