Which service should I use for invoice recovery for an SME?

Around 80% of SMEs experience late payments. These unpaid bills can have serious consequences for your business: difficulties meeting your own commitments to suppliers, hampered investments, lack of liquidity to finance growth, etc. It is therefore essential to react quickly and effectively to recover your receivables.

Fortunately, there is a solution to recover your debts and preserve the financial health of your SME: outsource the collection of your invoices. Several options are possible: recovery by bailiff, by lawyer or by a debt collection company .

Recovery by bailiff or judicial officer

Bailiffs, now called Judicial Commissioners*, are public ministerial officers authorized to recover debts on behalf of their clients. They intervene in amicable or legal proceedings, depending on the situation and the relationship between the creditor and the debtor.

Amicable recovery consists of finding an amicable solution between the creditor and the debtor, without going through the courts. The bailiff then plays the role of mediator, by contacting the debtor by mail to try to find a payment agreement.

If amicable recovery fails, the bailiff can then initiate legal proceedings . This practice consists of obtaining an enforceable title from a court, which will allow the creditor to force the debtor to pay his debt.

However, be careful to choose your court officer carefully. Bailiff procedures are very formal; interventions can be perceived as more intimidating and can seriously damage commercial relations between a company and its customers.

Furthermore, although he is an officer of the court, the bailiff has no right of action without a judgment. He therefore cannot seize wages or movable and immovable property without the decision of a judge.

Finally, its territorial competence will force it to act only within a limited perimeter.

*Since July ^1, 2022, a new profession of Judicial Commissioner has been created. It replaces the former professions of Bailiff and Judicial Auctioneer, which have been merged.

Recovery by lawyer

A lawyer is essential for complex cases involving legal disputes. They can advise you on the best strategy to adopt, draft the necessary legal documents, and represent you in court. These legal proceedings can be time-consuming. While a lawyer’s legal expertise is certainly invaluable, their fees can be very high.

Recovery by debt collection company

Debt collection companies, such as GESTION CREDIT EXPERT , also offer effective solutions for recovering your debts, whether amicable or legal.

In an amicable recovery , the debt collection company will first contact the debtor by telephone or mail to remind them of their unpaid debt and, if necessary, offer a personalized payment schedule. If the debtor cooperates, a payment agreement can be established. The recovery will thus result in prompt payment.

On the other hand, if the amicable recovery has not been successful and the debt justifies it, the debt collection company may, with the consent of the creditor, initiate legal proceedings for recovery against the debtor.

In this case, she will be responsible for monitoring the procedure and enforcing the judgment. She will manage the lawyers and court officers if necessary.

GESTION CREDIT EXPERT makes every effort to favor amicable recovery, because it allows to preserve the commercial relations between the creditor and the debtor. But if despite the efforts made, the payment is slow in coming, then we launch with the agreement of the creditor, the judicial recovery procedure . For example, in the context of a payment injunction procedure:

• We draw up the application ourselves, requesting that the court assume the maximum amount of costs and expenses by the debtor,
• We manage the actions of the Judicial Commissioners selected according to their territorial competence and their reputation
• We negotiate the lawyers’ fees as fairly as possible and we keep their diligence under control,
• We refuse payment for any act not requested by the manager.

GESTION CREDIT EXPERT guarantees total cost control and places the interest and satisfaction of its customers at the center of its actions by making the most appropriate and fair decisions.

In summary, the choice between a debt collection agency, a lawyer or a bailiff will depend on various factors, including the nature of the debt, the amount at stake, the level of cooperation of the debtor and the financial resources available.

Importance of effective debt collection management for SME cash flow

SMEs are particularly vulnerable to late payments , particularly because they very often produce goods or deliver services for large public or private clients. If they pay late, the latter negatively impact the competitiveness and profitability of their suppliers.

In concrete terms, debts or late payments can have serious consequences, such as:

• Cash flow difficulties : Businesses may find themselves short of cash to pay their own suppliers, employees and day-to-day expenses.
• A real cost : Unpaid bills represent a greater cost for businesses than they appear. In addition to uncollected revenue, additional or compensatory revenue must be generated. This effort, necessary to offset the impact of unpaid bills, calculated according to the net margin rate, is too often underestimated. Added to this are the costs of recovery actions and legal proceedings.
• A deterioration in customer relations : reminders for unpaid bills can harm the commercial relationship and lead to customer losses.
• Lengthy and costly litigation procedures : if amicable recovery fails, SMEs may be forced to initiate lengthy and costly litigation procedures.

Good cash flow management therefore allows companies to meet their financial obligations, invest for development, and seize growth opportunities. This includes:

• Implement clear and rigorous invoicing procedures: invoices must be sent on time and include all necessary information (due date, payment terms, etc.).
• Follow up with customers regularly in a professional and courteous manner.
• Tailor reminders to the customer : It is important to tailor the tone and frequency of reminders to the customer’s profile and payment history.
• Hire a debt collection professional: Debt collection companies have the skills and experience to recover even the most complicated unpaid debts.

By entrusting the recovery of your debts to GESTION CREDIT EXPERT , you opt for peace of mind and security of your cash flow.