Effective debt collection in 2022 - What you need to know

Are you experiencing customers not paying for your work done or products delivered? Don't worry - you're not alone in this problem. Fortunately, there are many (and good) ways to get your money back via debt collection - either in the form of 'do it yourself debt collection', or with the help of a lawyer or debt collection agency.

Collectia is one of the largest debt collection companies in the Nordic region - and not without reason. For more than 150 years, we have helped everyone from the corner florist to some of the Nordic region's largest companies and corporations establish an effective debt collection process.

Whether you are a client of ours, a client of a competing debt collection company - or maybe not even a debt collection company yet - we feel obliged to share our best tips and tricks to get more out of debt collection.

Read the article here and get inspiration to get more out of debt collection.

Tip 1: If you snooze, you lose

There's an old English proverb that says, "if you snooze, you lose" - and the same is true if you're an accountant or business owner looking for an efficient debt collection process.

Because experience shows that the faster you respond to a customer's non-payment, the more likely you are to get your money back.

There can be many reasons for non-payment, from a simple oversight to an inability to pay. Whatever the reason, it's important that you as a business react quickly and try to find a solution - and preferably before other creditors get involved.

Tip 2: Credit assessment of your customers

Credit scoring your customers has never been easier - and as a debt collection company, we recommend you do it.

Whether you choose to credit check your customers every time they shop with you, every time new customers come in - or every time they order more than a certain amount - is up to you. We can clearly see that the need for debt collection can be minimized - or even avoided altogether - if companies make greater use of credit assessments than they do today.

A credit rating gives you a (better) financial insight into the customer's financial situation and ensures that you know who you are actually doing business with; their name, address and contact details are correct.

By the way, did you know that Collectia has its own credit rating platform, Qatchr? Try it for free right now.

Tip 3: Have a process ready

Fortunately, few businesses experience debt collection as a major problem. It's something you might experience a handful of times a year.

Whatever the frequency of debt collection cases your business has, make sure you have a process in place - and stick to it

Who handles our bad payers? What do we do when the customer doesn't pay? Do we call the customer? Do we send a collection notice - or just a reminder? Do we collect the debt ourselves - or do we let a debt collection agency handle it?

Whatever your process is when a customer doesn't pay, make sure you agree in advance so the right people know who does what.

Tip 4: Send to a debt collection agency - if you don't want the hassle

We see a lot of companies that don't want the hassle of dealing with bad payers. It often ends up in a write-off of the amount in the belief that it's probably not worth chasing the money anyway.

Fortunately, it pays to take action and if your company doesn't want to spend time and resources on collecting an outstanding debt, we recommend that you send the case to a debt collection lawyer or a debt collection agency.

At Collectia, for example, we offer "no cure, no pay" - if we don't get your money back, it hasn't cost you anything. We live off the fees, interest and costs that can be imposed on the case.

Tip 5: Know your options

Debt collection is an unknown quantity for many companies - and that's a shame, because there are many good tools available if you don't want to let a debt collection agency handle your debt collection - but want to do it yourself.

However, most companies are often unaware of the options available - what can we do? When can we send the first debt collection notice? When can we send the first reminder letter? And how much can we charge in reminder fees and compensation fees?

If so, we recommend you read our guide here: