How do you improve collection of your overdue invoices?

Collecting overdue invoices should be part and parcel 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’s therefore vital to adopt the right attitude and maximise your chances of collecting the money you are owed. 

 

1.    Act fast

Collecting an overdue invoice is a race against the clock, so a swift response is crucial to maximise your chances of success. That’s why it’s essential to identify late payments quickly, so that you can take action as fast as possible.

2.    Use software to manage dunning

Business software can improve your monitoring of overdue invoices. It enables you to generate reminders automatically whenever a late payment is detected and to easily monitor the progress of each case.

3.    Collect debts without going to court

The best way to collect your unpaid debts is to reach an amicable agreement without resorting to legal action. Amicable arrangements are less time-consuming and less costly than going to court, and have the additional benefit of preserving the business relationship. However, they require a strong dose of diplomacy and above all excellence in negotiating skills.

4.    Payment by instalments

The best solution for an amicable recovery is to put in place an instalment plan. A good instalment plan will opt for the shortest possible collection period and include late payment interest to compensate for the extensions granted.

5.    Use a collection agency

Using a debt collection agency is a key route to success in out-of-court debt recovery. Calling on a professional with sound legal training and excellent negotiating skills strongly improves your chances of collecting your unpaid debts.

Euler Hermes takes care of collecting your unpaid invoices and gives you the guarantee of payment for the products and services supplied. In the event of non-payment or if your customer goes bust, Euler Hermes will pay your claim after 60 days. 

 

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