International Debt Collection

Late Payments – a matter of life or death for many SME’s

As far back as 1997, the European Commission pointed out that, “Late payments represent an increasingly serious obstacle for the success of the single market”.  The scale of the problem however is overwhelming:

- European bodies and official bodies lose an estimated €25 billion every year because they are obliged to finance unnecessary credits

- Around 1 billion invoices default each year in Europe and turn into debt collection cases

According to media reports in January 2008, the money owed to British small and medium sized businesses rose by £2.6 billion in 2007 to £18.6 billion.  Almost a fifth of firms now employ someone to chase overdue invoices.  As a consequence, the average company loses about 17 days a year on this task alone.

International Debt Recovery

As intra-Eu trade grows and the worldwide economic downturn tightens its grip, late payments and disputes will increase.

In local business transactions, people who do business speak the same language, mostly have the same cultural heritage and often know each other.  They know about local negotiating terms and about local ways of resolving misunderstandings.

Cross-border transactions present a different problem.  For obvious reasons, misunderstandings or poor handling of other parties are far more likely and as a result, late payments and payment disputes are far more common.

Differences in payment behaviour

Furthermore, the great variations in payment behaviour in the European market makes for unequal – some would say unfair – conditions for trade between countries.

Companies in southern Europe have typically longer payment terms and are happy to receive early payments.  Scandinavia on the other hand has much shorter average payment terms and expects invoices to be settled quickly.

For more information on International payment behaviour, please request a copy of our European Payment Index.

Overseas debt collection problems

Dealing with overseas customers and international debt recovery presents a number of problems:

- communicating with your customers effectively

- tracing your customers when efforts to contact them have proved fruitless

- being able to exert enough pressure on an overseas customer to get paid without damaging existing relationships and the potential for further trade

- understanding the cultural nuances of your overseas customers so as to maximise recovery of any outstanding receivables

- understanding the legal platform in the country of your customer so that you are better able to take advantage of the system

 

International Debt Recovery - Intrum Justitia's Solution

Intrum Justitia is Europe’s leading provider of Credit Management Services, and assists clients all over the world in improving their cash flow and long term profitability.

Unlike many international collection agencies which operate multi-lingual call centres to handle the collection of international debts, Intrum Justitia operates via its 23 sister offices in 24 markets around Europe and has a further network of agents operating in 170 countries worldwide.  Because our overseas debt recovery activity is conducted from within the country in which the customer is based, we understand the culture and payment habits better and are more able to collect effectively.  This results in improved collection performance.

Communication with Intrum Justitia is carried out through your dedicated client services team based in Liverpool and via our on-line debt management portal, Intrum Web.  For our clients, the service is seamless and Intrum Justitia Uk deals with its relevant overseas offices on their behalf.

The debt collection process encompasses a range of contact strategies including letters, telephone calls, SMS etc. as deemed appropriate by the local office collecting the debt.  Tracing facilities can be provided where customers have moved or are proving difficult to locate.  In addition, should it be necessary, we can take legal proceedings if authorised to do so by our client.

Global debt recovery

The Intrum Justitia brand is recognised throughout the world as a leader in Credit Management.  This in itself increases the likelihood of obtaining payment and is our clients assurance that their brand integrity and customers are in safe hands.

 

For further information regarding International debt recovery, please go to On Demand Collections or call us on 0870 414 0044.