How To Recover Your Debt - Online Self-Collection!


Entrepreneurs sometimes wanting to retain a client decide to issue an invoice with a deferred payment date. However, not always the customer pays such an invoice on time. How to recover a debt yourself?

How to recover a debt on your own

Debt does not arise suddenly, so it is important to react in advance to contractor's delays in paying installments or lack of contact on his part. The golden rule should be consistency. If the creditor shows the debtor that recovering the debt is a secondary matter for him, it will certainly be used to his disadvantage. That is why it is worth reacting immediately, e.g. with the first delay in paying the installment and showing that you are a consistent and unbending person. One must remember about constant contact and, consequently, systematic reprimand.

Unless the company has its own debt collection department, often in order to avoid long-term contracts with debt collection companies, entrepreneurs decide to take matters into their own hands. A person who will act as a debt collector should have certain character traits. Conversations with debtors are usually very difficult and long, so the debt collector cannot get emotionally involved or show weaknesses. However, an explosive and aggressive person will also not be a suitable negotiator. It should be remembered that companies and private persons from whom the company tries to recover the debt are quite often their long-term clients and it is not worth showing at the beginning that earlier cooperation with the debtor is irrelevant for the creditor.

Independent debt collection in online accounting

Online accounting systems have the option of defining reminders about the lack of payment of the invoice and, importantly, the possibility of sending them not only after the payment deadline, but also before. As statistics show in the subject of debt collection, prevention is very important.

It is also possible to send reminders via SMS short text messages. To send a reminder about the lack of payment from the system, simply select the invoice and then select SEND from the menu and indicate the appropriate choice.

Ordering debt collection to be carried out by an external company

Outsourcing a debt collection agency to recover debts can be a very good idea, but entrepreneurs must remember that the sooner they decide on this method of debt recovery, the better for them. The effectiveness of external debt collection depends on:

  • the amount of the debt,

  • overdue liabilities,

  • industry,

  • the circumstances of the debt.

Most debt collection companies work on commission, which means that they receive their remuneration only after recovering the client's receivables. The commission on the repaid amount may be several or even several percent. Its height depends, among others, on on the type of case and the length of the overdue period. Importantly, the debtor may also be required to pay remuneration for the debt collection company.

Debt exchange, i.e. sale of debts

An entrepreneur who decides to sell a debt puts his debt on the stock exchange. This announcement is free of charge and the information becomes publicly available. The entrepreneur can set a specific price for which he wants to sell the debt or put it up for auction. Debts are bought by companies that automatically become their owners, so here, too, the length of the overdue period and determining the possibility of recovering money are important. Unfortunately, quite often the amount that the trader will receive in hand is much lower than expected.

To sum up, regardless of the chosen method of debt recovery, the entrepreneur must remember to be consistent and not to postpone the debt cases.