5 tips to improve the collection of your unpaid invoices

Late payments are one of the most common risks for companies. Last year, more than one business out of two had to deal with late payments. One in three companies had already to deal with insolvent customers. The economic crisis linked to Covid-19 will just worsen the situation. Late payments and defaults of payment resulting from the Coronavirus crisis will have a snowball effect more than ever. Our economists forecast a 10% increase of insolvencies for Belgium (a record number of more than 23,000 bankruptcies by the end of 2021) and a 31% increase for the Grand Duchy of Luxembourg.

The impact of the Covid-19 crisis is unprecedented; prevent and cure as much as possible. This is why we propose you 5 tips to improve the collection of your unpaid invoices.

As far as unpaid invoices are concerned, you can’t be careful enough. Alarm systems in the form of digital tools that keep track of your incoming and outgoing invoices are the key: not only do they keep transparent records of everything; they also give your staff the space to concentrate on their core tasks instead of on invoices.

The same goes for your communication towards customers: there is no need to wait until a deadline has expired. On the contrary, a friendly reminder before the due date is more sympathetic than a first dunning letter once the deadline is past. Moreover, this increases your chances of actually 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. If you want to keep 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 has no affiliation with either you or your customer and can therefore make an objective assessment. In addition, these experts have plenty of experience with difficult negotiations.

Although many businesses claim to be prepared for unpaid invoices and defaults of payment, the risk of a snowball effect remains significant. Defaults of payment and insolvencies regularly trigger a chain reaction. This is why it is very important to protect yourself. Due to the Covid-19 crisis, this is more than ever essential.

Trade credit insurance solutions of Euler Hermes protect your company against defaults of payment and insolvencies of your customers. Concretely:

• we monitor the financial health of your prospects and customers;
  
• we collect your unpaid invoices;
  
• we indemnify you when a customer doesn’t pay his invoices, even if your customer goes bankrupt.
  

Learn more about our trade credit insurance solutions.

Do you have questions? Very likely. After all, trade credit insurance is a broad and multifaceted.

Feel free to contact our experts. They will be glad to help you.