Debt collection is above all an idea on how to solve the problem, sometimes allowing the debtor and the creditor to reach an agreement. It does not always help if you simply block your debtor’s operating activities: this does not make repayment any easier.
Effective management of receivables guarantees financial security for the business and improves its competitive edge. An appropriate and systemic policy of monitoring receivables allows the business to react in a timely manner to any irregularities that may appear in this field. In this manner, the company is free to pursue its core activities and to increase its competitive advantage. Receivables management does not have to be associated with a typical debt collection agency whose only task is to recover the debt using the legally available measures.
Default in payment by contracting parties is a particularly vulnerable area for any business. It leads to a certain kind of chain reaction in which entities that do not obtain payment from their debtors fail to pay the amounts they owe others. As a result, creditors become debtors too, and the functioning of the business is distorted.
Direct contacts with the debtor in order to determine a repayment schedule, as well as potential litigation and enforcement services yield the expected effects, namely repayment of the debt.
The problem is solved by working with a professional entity specialising in receivables management. Payment monitoring, particular attention to untypical debtor behaviour, and timely reaction make it possible to prevent the debt from becoming barred by the statute of limitations. Assessment of the contracting party’s financial standing and a legal analysis of the available documentation are the fundamental tasks performed by the service provider. If the contracting party fails to pay, it is a practical and convenient solution to use a third-party operator.
“Taking it all in all, I find it is more trouble to watch after money than to get it.”
Michel Eyquem de Montaigne