Frequently asked questions on debt collection during the corona crisis
What can I do if my invoice is not paid?
Our advice is not to do very much differently than before the corona crisis. In other words: follow the regular process of dunning and - if possible - try to reach a negotiated solution with your debtor. It may help if you postpone payment for a few weeks or agree on a payment schedule. Always try to assess and/or find out whether your debtor really cannot or would rather not pay. This obviously requires a different approach. A logical tip, but we like to emphasise it: always put all agreements made in writing, so you can fall back on them and have a strong position.
Should I extend my payment terms?
This would be a nice gesture towards your customers, who will no doubt appreciate it. But before you do this, it is obviously very important to check that you are not jeopardising your own cash flow - and perhaps even the survival of your business - by doing so. Therefore, monitor your cash flow daily and make sure your liquidity stays on track. Should your debtors run into trouble, you can always deviate from your payment terms. But for now, we advise: simply apply the payment term you are used to.
Should it come to that: can bailiffs still do their jobs now?
Yes, they can. Although debt collectors also work from home as much as possible, collections can often processed without problems and without delay be taken. During the corona crisis, a special campaign was even launched by the Royal Association of Bailiffs (KBvG), called 'Calling is solving'. With that campaign, the bailiffs hope to early contact meet with debtors so that payment problems are made negotiable and resolved quickly. If it does come to a home visit, subpoenas and other so-called writs should of course be handed over in person. Bailiffs observe RIVM guidelines and, if necessary, the writ is left in the mailbox. The usual explanation is then given by phone or mail, for example.
Courts are closed. What does this mean for the (judicial) collection of my claims?
The judiciary is also adapting its ways of working because of the coronavirus. The courts, courts of appeal and special colleges are working through, as far as possible remotely and by digital means. From 11 May, trials with litigants in the courtroom will also be possible again on a limited basis, if the physical presence of parties is necessary. Criminal cases, juvenile (criminal) cases and family cases have priority in this regard, it is stated at Jurisprudence.co.uk.
Tips & tricks for debt collection during the corona crisis
In summary, we have the following concrete tips & tricks for you regarding debt collection during the corona crisis.
1. The earlier you signal, the better
Prevention is better than cure. We therefore advise companies and organisations - especially now - to identify even earlier how your customers and suppliers are doing financially. Find out where the payment risks are for each customer and each outstanding invoice. Estimate whether you can expect payment problems. Is that the case? Then contact these debtors at an early stage and do not wait until the payment deadline has expired. Inquire about your customer's financial position and make concrete arrangements for the payment of your invoices.
2. Follow your normal debtor management process
Deviating from this may be tempting, but our advice is to continue your regular debt collection process. Adhere to the normal payment terms and send reminders and demands in the same way you always did. Also try to get in touch quickly - preferably by phone - with the debtor to find a solution in a personal way.
3. Separate the 'non-capable' from the 'unwilling'
In their approach, debt collection professionals separate the 'non-willers' from the 'non-cooperators'. Non-willers need a push and benefit from clear agreements and strict adherence to them. They 'misuse' the corona crisis to get out from under their obligations. In this day and age, it is more realistic that you have to deal with 'non-capable' companies: the ones that have seen their turnover drop significantly and simply cannot meet their financial obligations. You can of course adjust your approach accordingly, but try to make good agreements with these parties as well. Because you should still be paid, so you can also meet your financial obligations.
4. Engage a debt collection specialist in time
Especially in times of crisis, your own liquidity is vital. So engage a debt collection specialist in good time, who will pull the rug out from under your feet. Of course - in consultation with you - they will take the situation of your customer(s) into account, but their primary interest is your liquidity.
Do you have questions (partly) as a result of this article or would you like to start a concrete collection process? Then contact us, we are happy to serve you.
