Dear Entrepreneur, have you ever wondered about the chain of events that occurs if you fail to pay the invoice in time? Considering the scale of payment jams in Poland, hardly anybody seems to think about it at all, although the consequences may be enormous, they may even lead to the bankruptcy of your enterprise. Obviously, this is the worst case scenario, But it would be wise to consider what might happen if you fail to pay your invoices in time.
First of all, an entry about the company and about the debt amount may be disclosed publicly in the Economic Information Bureau, as a result of linking the debt to a specific legal relationship or information submitted by the creditor. As a result, the positive image of the enterprise, which has been built for many years, is damaged.
Another effect of failure to pay the invoices due may be a listing on the so-called exchange of receivables. Disclosing information about arrears makes it difficult to conduct business activity and becomes a problem in everyday life. We are devoid of certain facilities, such as an ordinary consumer loan or the possibility to sign an agreement with mobile phone operators.
Another instrument to discipline debtors may be an entry in the Register of Insolvent Debtors maintained by the National Court Register. Further, painful consequences include court enforcement proceedings. Losing such case results in enormous costs. A creditor who has an order for payment may encumber the real property of the debtor. This is just one step away from enforcement.
The final step for the creditor, if the debtor has been declared insolvent, is to file a motion at the commercial court to declare bankruptcy of the enterprise. In justified cases, if the company fails to file such motion on its own initiative, it risks being deprived of the right to conduct business activity for a certain period of time.
As you can see, settling financial liabilities in time may allow us to avoid many painful consequences. A Pragmatic Entrepreneur knows well that a determined creditor may take all the aforementioned steps even for just one unpaid invoice.
Published on: 9 November 2016