Economic Situation and debt collection in France

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The economic situation of France in March 2021.

French companies have resisted rather well during the Covid-19 pandemic.

To date, and thanks to the support of the public authorities, there has been no wave of bankruptcies.

A few large groups have taken advantage of the situation to sell their unprofitable activities and to close excess stores and outlets. They often used legal proceedings, either a safeguard plan or legal redress to facilitate negotiations with buyers. The traders benefited from the support of consumers who did not hesitate to go to the stores despite the sanitary measures. Consumption habits have changed dramatically; for example, after the first lockdown consumers flocked to shoe stores, but activity in this area has largely subsided thereafter.

The “drive” system in the food trade has had considerable success, leading to management difficulties for the brands concerned. For everything related to sports, cycling, e-bikes, many products are out of stock and replenishment is long overdue. Whole sections of the economy are overheating and unable to cope with new demands, including landscapers, pool engineers, carpenters, tilers, IT service companies. The deadlines are getting longer, it takes several months for them to intervene and many are no longer accepting new clients.

Sectors closed by administrative decision (restaurants, bars, cinemas, etc.) benefit from support measures from the public authorities which have enabled them, with certain exceptions, to stay afloat. For the solvency analysis, the databases had to modify their algorithms to approach the financial reality linked to the pandemic; the non-publication of accounts possible for medium-sized companies and for small companies to date makes the work of analysts more complex. Bank unpaid bills were numerous during the first 2 confinements, but companies massively regularized payment incidents. It also turned out that the Banque de France behaved very flexibly about payment incidents. At the end of the first quarter of 2021, there was a significant drop in payment incidents and debt collection disputes. Debt collection companies, however, find that the creditworthiness of companies that are seriously overdue in paying their invoices is deteriorating. In the portfolio of debt collection companies, nearly 47% of debtors are in a seriously compromised financial situation.

It cannot be said enough that time is the greatest enemy of unpaid bills. Each week that passes after an unpaid deadline increases exponentially the risk of never collecting the bill. One year after the invoice, the chances of recovery of this debt are almost nil. Today the government has just decided to confine 30% of the French population which will not be without consequences on the economic situation in France.

 

GEVO specialist in Commercial debt collection in France.

Founder of the international debt collection network SEKUNDI.

General terms and conditions of sale between professionals in France mandatory information’s

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General terms and conditions of sale between professionals in France mandatory information’s.

Obligation of companies

In France the basis of commercial negotiation between professionals, the General terms and conditions of sale must be communicated to buyers who request it. Which mentions should be included? How to communicate them? What sanctions in case of non-compliance with these obligations?

Between professionals (B2B), the General terms and conditions of sale must be communicated to buyers or service seekers who request it. In this case, they must respect specific rules both in terms of their drafting and their mode of communication.

This obligation to communicate the General terms and conditions of sale between does not apply if no customer requests it.

The mandatory mentions of the General terms and conditions of sale between professionals

When they are formalized, the General terms and conditions of sale between professionals must obligatorily include a number of mandatory information provided for in Article L.441-1 of the French Commercial Code. They must include:

  • Settlement terms (including terms relating to payment terms, penalties for late payment and recovery fees)
  • Any price reductions and discount conditions
  • The unit price scale.

Particular mentions

The General terms and conditions of sale may also include optional information such as the terms of termination of the contract, clauses relating to cases of force majeure (natural disaster for example), retention of title or limitation of liability of the seller.

The rules of communication of the General terms and conditions of sale between professionals

If no particular formalism is required by law, the general conditions of sale must be fixed in writing, by any means constituting a durable medium. Generally, the general conditions of sale are found on pre-contractual documents (advertising documents, etc.), contractual documents (purchase orders, contracts, etc.) and annexes (signs, posters affixed to points of sale, etc.). ).

It is possible to establish general conditions of sale differentiated according to the category of buyers of products or applicants for services. To define its categories of buyers, a distinction must be made between:

  • Wholesaler or trader (B2B) buyer
  • Supermarkets
  • Any specialized company
  • distance selling businesses.

The obligation to communicate the general conditions of sale applies only for professionals of the category concerned. The supplier can therefore write as many different terms and conditions as there are categories of buyers.

 

What sanctions in case of non-compliance with the general conditions of sale between professionals?

In the event of a breach of the drafting and communication requirements of the general conditions of sale, Article L.441-1 of the French Commercial Code provides for an administrative fine of up to:

  • € 15,000 for a natural person
  • 75 000 € for one personeiffel-tower-1156146__340

Unpaid bills bad habits.

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Unpaid bills bad habits die hard. The media, social networks and discussion forums on economic issues constantly evoke the next global economic crisis that they say is on the horizon. One of the consequences of this crisis in the making will be a resurgence of unpaid bills. For the professionals of the client risk, for the credit-managers and the professionals of the recovery of the unpaid bills all the indicators are with the red. The first fruits of the crisis are seen by an upsurge of late payments in all areas of activity. Wherever the payment initiative is left to the customer (payment by check, transfer, draft) late payments and unpaid bills accumulate. The regulations are obtained only by a tedious and time-consuming work to make the reminders. This work is all the more difficult because the favourable economic situation of recent years has led to a massive return of bad habits in preventing unpaid bills. And yet 4 simple rules and easy to implement will significantly reduce unpaid bills they concern:

The client data’s

Billing

Disputes

“Time is money”

The client data’s managed by the sales team must contain the following elements:

The exact business name of the client and not his brand

The manager’s mobile phone

The email address of the person in charge of the regulations

The exact bank details (Bank Statement + IBAN)

The registration number in the Trade Register.

Only a well-maintained client file will allow for error-free billing and will make it easier for reminders teams to work.

Disputes must be identified which requires having the name of the contact and a way to contact him.

And finally the adage Time is Money does not exist without reason. As a collection professional, we see cases arrive every day with the following mention “it has been months since he reacts to anything he has not even looked for the registered letter”. Avoiding unpaid invoices requires acting quickly and if possible before other creditors.