Effective debt collection in 2022 - What you need to know

Do you have customers who don’t pay for the work you’ve done or the products you’ve delivered? Don’t despair—you’re not alone in this problem. Fortunately, there are many (and effective) ways to recover your money through debt collection —either by handling it yourself or with the help of a lawyer or a debt collection agency.

Collectia is one of the Nordic region’s largest debt collection agencies—and for good reason. For more than 150 years, we have helped everyone—from the florist down the street to some of the Nordic region’s largest companies and corporations—establish an effective debt collection process.

Whether you’re a client of ours, a client of a competing debt collection agency—or perhaps haven’t even hired a debt collection agency yet—we feel obligated to share our best tips and tricks for getting more out of debt collection.

Read the article here and get inspired to make the most of debt collection.

Tip 1: If you snooze, you lose

An old English proverb says, “If you snooze, you lose”—and the same is actually true if you, as an accountant or business owner, want an effective debt collection process.

Experience shows that the faster you respond to a customer's late payment, the more likely you are to get your money back.

There can be many reasons for a missed payment, ranging from a simple oversight to an inability to pay. Regardless of the reason, it’s important that your business respond quickly and try to find a solution—preferably before other creditors get involved.

Tip 2: Credit Assessment of Your Customers

It has never been easier to run a credit check on your customers—and as a debt collection agency, we recommend that you do so.

Whether you choose to perform credit checks on your customers every time they make a purchase, every time new customers sign up—or every time they place an order exceeding a certain amount—is entirely up to you. We clearly see that the need for debt collection can be minimized—and perhaps even avoided entirely—if companies make greater use of credit checks than they do today.

A credit check gives you a (better) financial understanding of the customer’s financial situation and, at the same time, ensures that you know exactly who you’re doing business with—that their name, address, and contact information are correct.

By the way, did you know that Collectia has its own credit check platform, Qatchr? Gain insight into your customers’ financial situation with a credit check through Qatchr. Here, you can access credit information that complements your own assessment of both personal and business customers—and see if they are listed in our debt registry, the Debtor List.

Try it for free right now.

Tip 3: Have a process in place

Fortunately, very few companies consider debt collection to be a major problem. It’s perhaps something they deal with just a handful of times a year.

No matter how often your company has to deal with debt collection cases, make sure you have a process in place—and make sure to follow it

Who handles our delinquent payers? What do we do when a customer doesn’t pay? Do we call the customer? Do we send a collection notice —or just a reminder? Do we handle collections ourselves—or do we let a collection agency handle it?

No matter what your process is when a customer doesn't pay, be sure to agree on it in advance so that the right people know who does what.

Tip 4: Send it to a collection agency—unless you want to deal with the hassle yourself

We see a great many companies that don’t want to go to the trouble of dealing with delinquent payers. This often results in writing off the amount, in the belief that it probably isn’t worth the effort to chase after the money anyway.

Fortunately, it pays to take action, and if your company does not wish to spend time and resources collecting an outstanding debt itself, we recommend that you refer the matter to a debt collection attorney or a debt collection agency.

At Collectia, for example, we offer a “no cure, no pay” policy—if we don’t recover your money, it won’t cost you a thing. We earn our revenue from the fees, interest, and costs that may be charged in connection with the case.

Tip 5: Know Your Options

For many companies, debt collection is an unfamiliar process—and that’s a shame, because there are plenty of great tools available if you don’t want to hire a debt collection agency to handle it for you—but would rather handle it yourself.

However, very few companies are often unaware of what options are available—what are we allowed to do? When can we send the first collection notice? When can we send the first reminder letter? And how much can we charge in late fees and compensation fees?

In that case, we recommend that you read our guide here: