What to do with defaulters?

You send your customer an invoice, but a payment is not forthcoming. Do you have to wait or let go of the matter immediately? Read here the steps you can take.

1. You send a payment reminder

You can start sending a payment reminder. Stay polite in this and ask him to make the payment. Isn’t he doing this? Then you send a second reminder. This time you can come across as a bit stricter. Just make sure you don’t relax the conditions. This gives the impression that the defaulter is winning. Also explain the amount briefly and specifically: what exactly is the bill for?

Also propose a specific date when you want the money in the account. Address the reminder to the contact you have had the most contact with and personalize the email or letter. You are so much more likely to succeed than to send an anonymous letter of formal notice.

2. Contact the defaulter by phone

In many cases, sending a payment reminder is a good way to collect invoices. However, it is not a guarantee that the defaulter will actually deposit the money into your account. If payment is not made, you have every right to contact your defaulter by telephone. Research shows that a simple phone call results in 33% more invoices paid. Some customers simply “forget” to pay. In that case, telephone contact can help to increase the social pressure. Make sure that you always remain polite in the telephone conversation. Sympathy increases the chance of a quick payment.

If you do not feel comfortable calling, you can also contact EuroCollect.eu. We have a lot of experience and know exactly what questions and answers are needed to get the defaulter to take action. This saves you valuable time and your customer relationship suffers less.

3. Call in a collection agency

Is the defaulter still not taking action? Then you can engage a collection agency, such as EuroCollect.eu. The role of a collection agency is very simple: collect your unpaid invoices. Of course there are costs involved, but many parties work according to the ‘no cure no pay’ principle. In that case, the defaulter pays the costs for the collection agency. Even if the invoice cannot be paid, you have no costs. At EuroCollect.eu we also work with no cure no pay.

4. File a lawsuit

Have you tried all of the above but to no avail? Then there is no other option than to file a lawsuit. It is important that you have business legal expenses insurance. With this insurance you can engage a lawyer. The lawyer sends the defaulter a summons, with which you take him to court.

In short, a subpoena contains the following:

• Your company’s requirement
• Substantiation of the requirement
• Evidence you have
• Motivation for the lawsuit

If it comes to this stage, it is wise to engage a legal adviser. Fortunately, most payment problems are resolved at an earlier stage.