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.
- Act fast
Collecting an overdue invoice is a race against the clock, so a swift response is crucial to maximize your chances of success. That is why it is essential to identify late payments quickly, so that you can take action as fast as possible.
- 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.
- 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. However, they require a strong dose of diplomacy and above all excellence in negotiating skills.
- 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.
- 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.