Overdue receivables are a cost item that quietly grows on a company's balance sheet. Delayed collection weakens not only cash flow but also the legal collectability of the claim. Documents get lost, the debtor's assets dwindle and the statute of limitations draws closer. This article outlines the sequence to follow when collecting corporate receivables.
1. Document management: collection starts with the contract
Collectability depends on how solid the basis of the claim is. Signed contracts, delivery documents, e-invoice records and account reconciliation letters are the evidence for enforcement proceedings. Adding jurisdiction, default interest and penalty clauses to contracts shortens any later actions for annulment of objection.
2. Formal notice
For claims without a fixed due date, the debtor is placed in default by a formal notice, and interest runs from that date. A formal notice served through a notary public also puts pressure on the debtor to pay, and many files are collected at this stage. The notice should clearly state the source of the claim, the amount and the deadline for payment.
3. Choosing the type of proceedings
If there are checks or promissory notes, enforcement based on negotiable instruments is preferred. An objection does not halt these proceedings, and attachment can be carried out earlier. For claims based on invoices and current accounts, enforcement proceedings without a court judgment are initiated. If there is a court judgment or an arbitration committee decision, enforcement based on a court judgment is used. If the claim is secured by a pledge or mortgage, the route of enforcing the collateral is followed.
4. Handling objections
If the debtor objects, either removal of objection or an action for annulment of objection is chosen, depending on the nature of the claim. Since mandatory mediation is a precondition to filing suit in commercial disputes, this step is also built into the plan. In the case of an unjustified objection, the creditor should not forget to request the twenty percent compensation for denial of the debt.
5. Asset investigation and attachment
Once the proceedings become final, bank accounts, vehicles, real estate, receivables held by third parties and salaries are searched, and attachment is applied starting with the assets that allow the fastest collection. For suspicious transfers, an action for annulment of fraudulent disposition is considered.
6. Reporting and closing
The distribution of files by stage, the collection rate and the costs are reported regularly. For files that are no longer collectable, a certificate of insolvency is obtained so that the claim can be recorded as a doubtful receivable. This cycle forms the basis of our firm's corporate debt recovery service.