Prevention is better than cure. And where 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.
Incidentally, it’s a good idea to not only use this reminder system for ‘when it’s too late’. It’s even more practical to have the system warn you a few days before the due date.
The same goes for your communication towards customers: there’s 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 reminder once the deadline is past. Moreover, this increases your chances of actually getting paid.
If no payment is forthcoming you should react as quickly as possible. Discuss the matter with your business partner and try to agree on a solution. If you want to continue the commercial relationship with your customer in the future an amicable settlement is often the way to go.
If the water between you and your business relation has become too deep, a professional debt collection agency can assist you. A debt collection service such as Euler Hermes has no affiliation with either you or your customer and can therefore make an objective assessment. In addition, Euler Hermes has plenty of experience with difficult negotiations and possesses the legal knowledge required to translate an amicable settlement into a watertight contract.
Conclude a trade credit insurance for future invoices, contracts and business relationships. This insurance policy doesn’t offer an ironclad guarantee but it does improve your odds. Companies are more inclined to pay invoices if you have trade credit insurance because in the event of non-payment they risk having their line of credit withdrawn by other suppliers as well.
Moreover, a credit insurance policy gives you peace of mind. The knowledge that compensation for an unpaid invoice within 60 days is a certainty relieves time pressure and leaves more negotiation room with your customer.