Minimize payment defaults with receivables management
When customers do not pay an invoice, many SMEs do not know how to proceed. Collection agencies offer a reputable service, are psychologically trained and have a high success rate.
The carpentry trade is facing harsh general conditions. "The customer has become more demanding," says company owner Roland Krummenacher. Since a high-quality piece of furniture still costs a lot, he notes a decline in payment morale among his customers. What should he do then? Send a reminder with a further payment deadline? Send a reminder? A recent study - the European Payment Report 2017 - shows that half of the Swiss companies surveyed fear liquidity bottlenecks due to late payment of invoices and a third even have to accept a loss of sales. SMEs are particularly hard hit: Due to payment defaults - by existing or unknown customers - they even have existential fears.
Economic stability thanks to Receivables management
"There are often knowledge gaps among SMEs on how to proceed professionally and legally in such matters," says Jason Glanzmann, director of serviced portfolios at Intrum Justitia. "Through a consistent Receivables management companies of all types can minimize such outages." Enclosed are a few tips:
- Perform a credit check on your customers.
- Legally, an SME is not obliged to send a reminder to a customer.
- We recommend two reminders each 40 and 60 days after invoicing.
- Send reminders early and consistently. It may well happen that an invoice did not reach the recipient or was forgotten.
- Transparent communication with the customer is very important.
- For reasons of fairness, we recommend that reminder and collection fees be shown in the GTC and that reference be made to the cost consequences in accordance with the GTC on the second reminder.
- Monitor your receipt of payment after invoicing.
- We recommend a consistent escalation and a handover of the claim between 70 and 90 days after invoicing.
Two options for collection
SMEs that hand over their receivables to Intrum after two reminders and within 75 days of invoicing benefit with "AGB75" from a consistent and transparent Collection. They pay neither a success fee nor debt collection and address research costs. "When SMEs opt for the so-called 'AGB90' you hand over the receivables to us after two reminders and usually within 90 days of invoicing. This is accommodating and transparent," explains Jason Glanzmann. The collection is always free of charge for the customers at "AGB90". They only bear the costs of debt collection and address research not paid by their consumers. Thanks to early escalation, Intrum Justitia has a high recovery rate for both AGB75 and AGB90.
Roland Krummenacher decided to protect his SME from payment defaults with such a service package. "It was important to me that I could hand this matter over to an experienced debt collection company and concentrate on running the business."
Contact for more information:
Intrum Justitia AG, sales.ch@intrum.ch, +41 44 806 85 57, www.intrum.ch
