If one of your customers hasn’t paid their invoice on time, and you’re wondering how to obtain payment without creating tension, amicable debt collection is the first step to consider. The aim of this phase is to find an amicable solution with the debtor, be it immediate repayment, an extension of the payment deadline, or a payment plan. Amicable debt collection, as opposed to forced debt collection, is based on communication between the creditor company and its debtor customer. Find out more about this process and its advantages.
The advantages of amicable collection
Amicable debt collection offers several advantages for companies. Firstly, it helps maintain good relations with customers by avoiding the threat of legal proceedings from the very first contact after an invoice has fallen due. This helps preserve the company’s reputation and promotes discretion.
What’s more, unlike forced collection, amicable collection is quick and easy to set up, which can reduce payment times for unpaid invoices. It is also less costly than legal action. Finally, in the event of subsequent recourse to the courts, proof of the efforts made to find an amicable solution may be in the creditor company’s favor.
How amicable collection works
Amicable collection relies on communication with the debtor. The creditor’s actions must be both clear about the need for payment, and open to negotiation depending on the customer’s financial situation. An amicable settlement agreement must be formalized in writing for greater security.
Key stages in the amicable collection process
The key stages in the amicable collection process include :
- Check debtor information: Before contacting the debtor, make sure that the invoice is indeed overdue and that the debt meets the legal conditions.
- Initial contact: Inform the debtor of the late payment in a friendly manner, either by telephone or e-mail.
- Reminders: Although not compulsory, reminders are recommended to find a solution quickly and demonstrate a willingness to settle the debt amicably.
- Proposing repayment solutions: Remain open to negotiation and formalize any agreement in writing.
- Regular monitoring of commitments: Make sure that the debtor is meeting its commitments, by verifying payments in accordance with the agreement.
- Sending a letter of formal notice: If no solution is found, this letter marks the start of the calculation of interest and late payment penalties.
Tips for successful out-of-court collection
To optimize amicable collection, follow these tips:
- Keep the lines of communication open and respectful.
- Establish realistic payment schedules.
- Document all interactions with the debtor.
- Use collection software to simplify tracking.
- Call in collection professionals if necessary.
In conclusion, amicable debt collection offers many advantages to businesses, and can be an effective way of recovering unpaid debts while preserving customer relationships. Respecting the key stages and adopting good practices are essential to the success of this process.
