What are the means of debt collection to deal with unpaid invoices? There are plenty available on the market. But think twice before choosing one. What is your goal? Recovering your money? Isn’t it possible to do so more efficiently? To help you find the best way to handle unpaid invoices, read this analysis we did.
We compared 4 strategies to deal with unpaid invoices:
1. Ask a debt-collection agency
How does it work?
To deal with unpaid invoices, you can call a debt-collection agency. They’re specialised in covering unpaid invoices. They will persuade your debtors to pay your invoices.
How long does it take?
A few weeks on average.
How much does it cost?
A percentage of the amount of the invoice, from 1 to 15%.
How is your relationship with your customer impacted?
Neutral.
2. Use a Lawyer
How does it work?
Using a lawyer to deal with unpaid invoices can be an option. You call on a lawyer when you want to start a legal procedure. You will do this only if your customer is dishonest or if he contests you invoice.
How long does it take?
From a few weeks to several months.
How much does it cost?
A (high) hourly rate.
How is your relationship with your customer impacted?
Negative
3. Calling in a bailiff
How does it work?
You can ask a bailiff to handle your unpaid invoices. The bailiff will officially bring a document to the attention of a specific person. The bailiff can go so far as to summon someone in court.
How long does it take?
A few weeks on average.
How much does it cost?
On average 30 euro per letter.
How is your relationship with your customer impacted?
Negative.
4. Automated communication
How does it work?
Dealing with unpaid invoices with automation is an innovative method. An SMS or an automated phone call can persuade your customer to pay his invoice.
How long does it take?
A few days on average.
How much does it cost?
Almost nothing.
How is your relationship with your customer impacted?
Neutral.
Try automation to handle unpaid invoices
Automated communication seems to be an interesting method to handle unpaid invoices. It gives results quite quickly, is affordable and preserves your relationship with your customer. So, which of these communication channels – SMS or IVR – is the most appropriate? Taking your company, but especially your customers, into account?
SMS or IVR to remind an unpaid invoice?
Both channels have advantages. You have to determine which is most suitable to your relationship with each customer. You know your customer best. Which channel would convince him to pay your invoice – and in the most suitable way? Also, if you doubt on managing those channels, be reassured. All of them are easy to manage. The implementation is quick and easy. You simply need to determine the content of the message, the moment you want to send it and the channel you want to use. That is it.
