Increased risk of defaults makes companies nervous.

We would like to inform you about a growing problem in business. The number of companies in arrears is rising and this can lead to a chain reaction. During the previous crisis, unpaid debtor accounts were the biggest cause of bankruptcies. Research by the Association of Credit Management Companies (VCMB) shows that at the time, a quarter of all bankruptcies were due to default.

But what does this come from? Research by debt collection and bailiff organization Flanderijn among more than 500 finance professionals who are involved in debtor management shows that debtor management is an underrated child in no less than 24 percent of organizations. This is remarkable because, at the same time, more and more organizations are struggling with a growing number of customers with payment problems. As many as 40 percent of finance professionals indicate that their organization has seen more customers with payment arrears in the past year.

The growing number of customers who do not pay invoices on time has a major influence on the work of the finance professional. More than a third of them say they have been increasingly concerned with payment arrears from consumers or companies for six months. Another 31 percent say their financial department's biggest focus is now on debtor management. Not all your debtors will pay the invoices properly (on time). There is a chance that your invoice will have to go to multiple stakeholders before it is made payable. It is also possible that the financial administration is not correct from anywhere. Or that there is no money available to pay your bill.

As a company, it is therefore important to be well prepared for payment delays and to prevent them. A tight debtor policy can prevent many problems. It can also make a difference to make use of factoring. By using factoring, you can sell your outstanding invoice and have 100% of the invoice amount in your account within 24 hours.

We have listed a few solutions and tips for you:

1. Check the creditworthiness of each customer before sending the agreement or order confirmation. This can be done via Dun & Bradstreet/ Moody's/GraydonCreditSafe
2. Use general delivery and payment conditions
3. Make use of general transport conditions
4. Have a customer sign for receipt
5. Invoice as soon as possible after delivery
6. Call the customer before the invoice period expires
7. Ensure a good and comprehensive reminder process
8. Describe the debtor management procedure and ensure awareness within the organization
9. Set ambitious goals and actions to the organization
10. Put each assignment in black and white so that you can always find it later: a deal is a deal.

Of course, you can insure yourself against tax risks.

Questions about debtor management, looking for advice in the process or interested in collaborating?