Collection level 3
|Despite numerous reminders made since the issuance of your invoices, your client has still not decided to pay you while nothing justifies this delay of more than 5 weeks.
Your cash flow and profitability (due to financial costs incurred) are negatively impacted which weakens your business.
This situation is unacceptable and you must send a formal notice to your client to step up the pressure, and protect your rights in case a legal action is needed to recover your due amount.
This formal letter is a necessary precondition to a litigation action. It has a deadline beyond which you announce your intention to your client to use other means to recover your receivable (legal action, transfer to a collection agency, reporting of overdue to your credit insurance ... etc).
Collection level 3
|The decision to send the letter of formal notice must be shared within your company. The accounting department, the commercial leader must speak with one voice to the customer so that he understands that he has no alternative but to pay the bills.
If your customer wants to pay you but can not because of financial difficulties, you can agree with him about an establishment of a contracted payment plan. You will keep good chances to get your money back without going through the box contentious.
Feel free to send a letter of formal notice (always with an acknowledgment of receipt). Through this type of letter you show your determination to get paid. The psychological effect that induces the formal notice is often enough to unblock the situation and the payment.
Without payment received before the deadline of your formal notice, you must go to the litigation stage to collect your receivables.
Next: negociate a payment plan
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