This is the last step of the amicable recovery process. It ends with the sending of a formal notice including a deadline for payment.
A pre-litigation stageDespite 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.
It constitutes a threat that must be put into effect your customer does not pay within the ultimate deadline.
Collection level 3At this stage of the recovery process, the essential action lies in sending the formal notice. Nevertheless, a last phone call can be made to inform the buyer that given the unacceptable situation of late payments you have reached the end of the amicable recovery.
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.
My DSO Manager, the online debt collection software
My DSO Manager offers powerful features to make quality reminders at the right time including Final notice.
Set up final notice letters or emails templates including late payment penalties and recovery costs, requesting the debtor to pay within 8 days.
If he doesn't, next step will be litigation action. See more with the online demo.