Can you avoid bad payers?

If you're a business owner, bookkeeper, finance manager or otherwise involved in business finance, you've no doubt experienced the challenges of bad payers - and the headaches that can come with them. Some customers pay their invoices late - while others choose never to pay. This can be tough on your cash flow and the extra work involved in getting your money back.

In this article, we focus on whether you can avoid bad payers and how to minimize bad payers. At the same time, we look at what you can do if the worst happens.

Unfortunately, the short answer is probably 'no'. Bad payers come in many shapes and sizes, and the reasons for non-payment can be many. They can also be incredibly difficult to identify. Fortunately, there are many things you can do to minimize your financial risk and the number of customers who are unwilling to pay. A credit check of your company's finances or a credit report on a private customer can be a very effective part of this work.

Dårlige betalere kan desværre aldrig helt undgås – uanset hvor mange måleparametre der analyseres og hvor mange kreditvurderinger, der foretages på en kunde. En positiv kreditvurdering er ikke en 100% garanti for, at kunden har god betalingsvillighed i fremtiden. Dog er det et fremragende værktøj og indikator for, om det er en økonomiske risiko ved at handle med den pågældende virksomhed eller privatperson.

A credit rating will undeniably minimize your risk of bad debt significantly - based solely on whether or not you know a bad payer from a previous debt relationship. A debt relationship refers to 'payment remarks' in the debt register. Notes that creditors report to the register of bad payers.

Of course, we also recommend that you combine a credit rating with common sense and general background checks on your customer. This could, for example, include the customer's key figures/accounting figures or similar that can reveal special circumstances about a customer's financial situation.

This is what you get with Qatchr.

Whether or not you've done a credit check or other background analysis on a customer beforehand, there are many good opportunities to get your money back if the customer unexpectedly fails to pay their invoice or other debt.

The most effective way to get your money back is through debt collection - either from a debt collection company like Collectia - or from a lawyer specializing in debt collection, also known as a debt collection lawyer.

Whether you choose debt collection through a debt collection agency or a debt collection lawyer, you will typically receive professional, streamlined and efficient handling of your cases/claims. In the debt collection process, reminder letters, collection notices(demand letters) will be sent out and the customer will be contacted by phone or in person.

The debt collection process itself often proves to be very effective - after just a few contacts with the customer/debtor. However, occasionally you will find that the customer does not pay in the extrajudicial debt collection process. If this is the case, it will be possible to run a legal debt collection process with the help of the bailiff court.

In other words, debt collection is the professional solution if you are facing challenges with bad payers. If you choose to let a debt collection company or lawyer handle your debt collection, you also minimize the headache of having to spend time and resources on making phone calls, sending out reminder letters, debt collection notices, charging interest and reminder costs - your debt collection partner will do that for you.

Do you need debt collection? Get in touch with Collectia