How to deal with defaulters?
March 2023 – To avoid cash flow problems, strict follow-up of outgoing invoices is essential. In this article, we provide some tips for dealing decisively but politely with defaulters.
The first weapon in your arsenal to avoid late payments is the payment reminder. You can send these (automatically) the day after the due date of your outgoing invoices. This way, you send a clear signal that you are closely monitoring your administration.
The tone of your letter or e-mail is clear but friendly. Always bear in mind that an error may be involved ("Perhaps the invoice escaped your attention"). Close with an explicit request to pay the outstanding amount within seven working days.
Importantly, also indicate what happens if the extra period is exceeded, referring to your general terms and conditions if you are going to charge administrative costs and/or interest.
Get in touch by phone
Has your customer still not paid three days after your first reminder? Then give him or her a call. Of course, you remain friendly on the phone too, but make it clear that it is in both your interests that the amount is transferred quickly.
End the phone conversation on a positive note. State your expectations for the future and leave room for questions if necessary. After your telephone conversation, put the agreements made on e-mail or in a registered letter.
Second reminder and legal action
Does that not help either? Then send a second and possibly third written reminder. Invariably mention the consequences of the late payment and charge additional administrative costs in the invoice. In your final reminder letter, say that this is the final warning and that you will then engage a collection agency or your lawyer. In that case, the dubious debtor will pay all overdue invoices (plus interest) as well as legal costs.
