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How to get ready for debt collection - Collectia Inkassofirma - Blog
Sebastian S.

How to get ready for debt collection

Debt collection remains an effective tool when your customers don't pay your invoices - whether you choose to do it yourself or hire a debt collection company to help you with your debt collection cases.

Debt collection is not a guarantee that your customer will pay. But there are actually many things you can do as a creditor to increase your chances... even significantly.

In this article, we highlight the things you can and should do to optimize the recovery process - for yourself, your customer and your debt collection agency if you use a debt collection agency.

1. Fast start-up means faster cash flow

It may sound trite, but the sooner you start the debt collection process - the sooner experience shows that you will get your money back.

Not only does it speed up the process, but in our experience, a quick response to the debtor demonstrates a serious and professional approach - and significantly increases your chances of getting your money back.

We recommend that you or your debt collection company react within 7-14 days after the due date. This could be in the form of a phone call to the customer or sending a payment reminder(reminder letter or debt collection notice).

2. Correct information is essential for effective debt collection

Unfortunately, many businesses are still bad at collecting basic information about their customers: full name, address and phone number.

If you start a debt collection process with missing, limited, incorrect or no information on a debtor, you're wasting unnecessary time and in the worst case scenario, a debt collection case will be dropped because you only have a name and a phone number.

Our recommendation is therefore that you always get as much information on your customer as possible, and possibly make use of Qatchr to ensure that the information is correct. In this way, a debt collection case can be started a few hours after it has been handed over to a debt collection company or lawyer - rather than perhaps never being started due to missing information.

Therefore, always make sure your ERP system or accounting software has this information before you start work.

3. Use an invoice that is easy to understand

Too many businesses use invoices that contain too few details about the customer and what they have bought.

In our experience, the more specific and accurate you are in describing what, how much and when an item was delivered on the invoice, the more clarity there is about the purchase. This will also be appreciated by the buyer.

A detailed invoice also makes it easier for a potential debt collection agency or lawyer to understand the product delivered. This puts the third party in a better position if the debtor has questions about the debt and the circumstances of the case.

4. Remember to inform the debt collection company about the process up to

It is extremely important that you, as a creditor, make your debt collection lawyer or debt collection agency aware of the process leading up to the invoice assignment.

Has your customer made a partial payment? Have you sent one, two or even three reminders to the customer? Has a debt collection notice been sent? Has the customer contested the claim?

All information is relevant for a debt collection company or a lawyer to know where the case should start and progress.

The right start-up saves time and unnecessary work - for both you and your debt collection provider.

5. The right debt collection agency or lawyer is crucial for your case

It can be extremely difficult to know which lawyer or debt collection company to choose. Many do a good job and many will be happy to help you with your debt collection cases.

However, all experience shows that the more active and persistent your debt collection company or lawyer is, the more likely you are to get your money. Which debt collection company do you think the debtor will pay first? The persistent/active ones and those that offer modern and transparent payment solutions. It is important to meet the customer at eye level and let them decide how to settle the debt.

Why you should choose Collectia

At Collectia, we have more than 150 years of experience in debt collection, as a professional authorized debt collection company.

We are one of Denmark's largest debt collection companies, and every day we help some of Denmark's smallest - and largest companies with their unpaid bills.

At Collectia, we have our own developers, which means that we can constantly make use of the latest technologies - ensuring you a professional, fast and secure handling of your debt collection cases; whether you have few or many cases.

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