At the beginning of the year, the analysts announced the end of the crisis and were forecasting improvement of the market trend. It has turned out that this excessive optimism was too early. A lot of entrepreneurs still wait for the payment from the debtors long time after the payment term.
Thus, the question how to recover the money and not jeopardize the relations with the debtor, whom we intend to continue cooperation with, remains valid.
It is obvious that the simplest way of recovery of cash is debt collection while the fastest one – sale of the debt. In both cases, there is a concern that the debtor being at the same time our business partner will rather be the object of such transaction and not the subject.
If your key customer is in default with payment of the receivables and you do not intend to suspend deliveries to them, sell the receivable within a tripartite understanding. The company financing the receivable, such as Pragma Inkaso, will agree with the debtor on the new schedule of receivable repayment. Thus, you will recover the due cash and your customer will have additional time for payment of the receivable.
The potential debt collection actions will be taken not earlier than 21 days from the date of expiry of the new payment term agreed with the debtor. The costs of the granted financing may be divided between the creditor and the debtor or transferred in their entirety to the debtor, depending on the arrangements between the parties. In this case, not only the creditor but also the debtor is the client of the receivable financing company.
It is a perfect solution for the partners with permanent business relations. If it is known that lack of payment results from temporary financial difficulties and not from bad will, financing of the receivables allows for solving of the difficulties.
Published on: 9 November 2016