Increased international trade – International debt collection is more applicable than ever.
International debt collection is about knowing who your customer is, what kind of opportunities you have and how to use these opportunities properly.
In line with increased migration to foreign countries and easier access for international customers, can we see that the number of invoices to international customers increase year by year. In fact, almost 10 % of European companies’ revenues comes from international clients. But, what do you do in the case where one of your customers live abroad or is moving without paying outstanding invoices?
Customer data – The key to success
Correct and adequate customer information, as well as quick transferring to debt collection are key factors to be successful in international debt collection. In Norway we are lucky to have a well-functioning people- and business information collecting company, but this is not always the case in other countries. Searching foreign databases for information about debtor with unknown birthdate or partial address can give wrong information or no information at all.
As a minimum requirement you should have correct info about following:
- Telephone number
- Email address
It is obviously not enough to have enough information without a well-functioning system with experience, capacity or systems to execute the collection in a satisfying manner. This depends largely from company to company. So, what possibilities do you have to collect your claim legally in foreign countries?
The general rule is the judicial recovery for past due collection claims abroad more complex, time consuming and costly than in Norway. Therefore, you must account for a longer and costlier process if you decide to pursue the claim legally, but there are some exceptions from this rule.
- If you already had a judgement in a Norwegian court and debtor moves abroad you can easily exercise the judgement within EU countries.
- Lugano convention makes it possible to pursue the claim legally in Norway, even if the debtor lives in a foreign country. The benefits with this alternative are that we already know the cost, and the process is quicker than abroad.
- EU has previously implemented “Late Payment Directive”, also know as 40 EURO Directive. This is occasionally used by Norwegian companies but can prove to be a good tool to quicken the payment for outstanding invoices against companies in EU.
Do you have good routines for registering of customer data and handling of invoices and reminders?
If you simultaneously use a collection partner with wide knowledge about both your own and the international markets will take you a step closer to proper treatment of your past due invoices.
Curious about our solutions for international debt collection? Please contact me for more information!
Christian van Dijk
Collection manager International