Debt collection for unpaid invoices at the digital era

Unpaid debt

The debt collection for the unpaid invoices will evolve with the accession of the digital era.
Either we call it numerical or digital, the actual world is confronted with a brand new Industrial Revolution. The payment’s management won’t escape the considerable changes occurring during the commercial exchanges.
The dematerialized sending of the invoices, the advent of new payments means, the end of the old system (checks, bank drafts, promissory notes) the arrival of the biometric credit card are innovations with which the firms will have to get used to.
The internal and external services of the collection of unpaid invoices will have to resolve new challenges.
The repressive and threatening era is over.
The financial and solvency information are more difficult to obtain, some anticipate their complete disappearance and the information’s opacity becomes the rule.
The debt collection of invoices at the digital era will go through more prevention: studies about the behaviours of the invoice’s payment and the litigation anticipation.
New communication tools towards debtors (clients) will be applied: social networks, smartphones, mails, text messages, this is the future for the debt collection for unpaid invoices at the digital era by GEVO.

Georges Vonfelt
www.gevo.fr

France Business is facing the lowest payment terms figures since 20 years

anglais, News

The latest statistics are describing good news for those making business in France.
There is a massive decrease of the payment delays. The real payment terms are now around 60 days after the invoice, in place of 65 days two years ago. And ten years ago there were, in the average, more than 90 days between invoice and payment.
The reason are new laws and new controls coming from the Civil Service. The fines are extremely high and the big Companies had to face controls and big fines and also the publication of the procedure in the Newspapers. The targets of the Civil Servants were very high level Companies in the Insurance Business, train producers, Hotel Chains and Pharmaceutical Conglomerates.
The real news is that the big Companies are no more safe from controls and they had to pay each a 375.000 € fine for having not respected the legal terms of payment.
But the figures are not the same in all the areas of activity.
The situation is more problematic in the Transport, Logistic, Information and Communication Business.
Georges Vonfelt
www.gevo.fr

Unpaid Invoice: the French summary proceeding called „ référé-provison“

anglais, News

The référé –provision is a legal proceeding through which a creditor summons a debtor in front of a judge to be sentenced to pay the amount he owes.

The sentence arise in more or less 30 days, and if then the debtor still don’t pay the invoice, the creditor is enabled to seize his assets without having to wait for an appeal decision.

When is it possible to start a Référé Provision proceeding?

The goal of the proceeding is to get the payment of an overdue amount.

In opposition to other summary proceedings you don’t have to prove an urgency to act.

You cannot use this proceeding if

The customer is bankrupt

The customer has his head office abroad and no firm in France

The unpaid amount is related to an unpaid Scheck

You cannot use this proceeding if there is a documented dispute, the creditor has the obligation to prove the reality of the debt. If not the Judge declares himself as not competent.

A debt is considered as really disputed if

The debtor contacted the creditor explaining that he don’t pay due of damages to the delivered goods, or due to the fact that the mission is not fulfilled.

To make a decision it’s necessary to check the validity of the contractual agreement

A paragraph of the contract gets another interpretation for one of the parties.

The creditor hast to make the debt credible for the judge.

He has to prove that he realized his tasks

What are the differences between référé provision and the injunction procedure?

The injunction procedure is made without the hearing of the debtor. There is a higher influence level on the judge during an injunction proceeding because he hears only the arguments of the creditor.

For this reason the debtor has the possibility to make an opposition toward the injunction.

During the référé provision there is a hearing of the debtor he can present his arguments. If the judge despite of those arguments sentence the debtor there is more or less no way to skip the payment.

If the debtor raises appeal toward the judge’s decision his chances to get a different decision before the appeal Court are very low due to the fact that more or less the appeals judges always confirm the first decision.

Uber’s influence on the payment behaviour

anglais, News, Unpaid debt

In France we are talking about an „ uberisation“ of the society due to the important and fast  evolution of the consumer habits.

The evolution is very quick in big urbanisation areas like Paris.

Due of those facts all the leading superstores or hypermarkets announced officially that they will reduce the size of their markets and exclude all the products which are big sellers on Internet.

In the meantime thousands of small companies which are in competition with the Internet start a bankruptcy procedure.

In 2016 in Paris and his suburbs the number of bankruptcies for Fashion retailers, Shoe retailers, small Hotels, small Transport and Taxi Companies raised about 20 % in comparison to 2015.

The suppliers of those companies have to adapt their credit management to this evolution.

In France all the laws and fines issued in the last years couldn’t stop the negative payment delays evolution. One of the major reason is the difficult relationship between the small companies and their Banks.

New ideas are raising coming from the involved professionals ( lawyer, judges, bankruptcy receivers and so on ) one of them is that if a small company goes bankrupt due of the late payment of one of his customers this one will have to pay all the debts of the bankrupt company.

Solvency Check

Solvency check

In France there is a major change.

The publication of the balance sheet was mandatory, for not doing you faced criminal charges.

From now on the companies with

  • Less than 51 employees
  • A turnover under 8 Mio Euros

Can make a demand to keep their balance sheet secret.

EXECUTION PROCEDURE IN CROATIA FOR DEBT COLLECTION

Unpaid debt

As a first step, official warning letter is send to the debtor. If there are no response from the debtor, in the first stage of the debt collection procedure in Croatia, the creditor commences the appropriate execution procedure by forwarding to the debtor the so-called Motion on the Execution Based on the Reliable Documents (reliable documents = invoices or excerpt from the creditor’s business books) through the notary public. In case of the debtor’s objection (debtor can file the objection to the notary public within 8 days as of receipt the creditor’s motion is revoked and is dealt with as an ordinary complaint (lawsuit)

in a lack of debtor’s objection, the Decision on execution will become final and binding, Financial Agency issues the order to all banks in Croatia to seize all of the debtor’s bank accounts. In case there is not enough assets on the bank accounts to settle the claim, debtor’s savings accounts and deposits are also seized. Additionally, it seems that this seizure also refers to all bank accounts the debtor might possibly open in the future.

MAIN SPECIFICS OF THE EXECUTION PROCEUDURE IN CROATIA

  • In order to initiate the execution procedure before the Public Notary; the creditor should have its PIN (Personal Identification Number) obtained before local Tax Department (this is the legal requirement envisaged under the Croatian Execution Law). Obtaining the PIN is a simple corporate action.
  • During the execution procedure, two original copies of invoice/s issued to the debtor, executed with corporate seal of the creditor and signed by its responsible person for billing matters must be submitted to the Public Notary. Alternatively, we can use the official excerpt from the creditor’s business books executed with creditor’s corporate seal and signed by its responsible person for billing matters. Furthermore, the foreign invoices/excerpts from the creditor’s business books must be translated in Croatia (to a Croatian language by the officially appointed court expert).