Tag Archives: #debtcollection

The return of late payments in France

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The return of late payments in France is confirmed. A few months ago, a large majority of business customers returned their payment means quickly or executed their transfers on time. This is no longer the case and credit managers are seeing an upsurge in late payments. It is currently necessary to invest a lot of time in the raises to keep the treasuries afloat. Whether the company is profitable or not a solid cash is an essential element to its sustainability.

Good repo management consumes a lot of time, and this thankless but indispensable work does not always fit into the planning of the accounting and financial teams. To master payment late payments one of the keys is not to leave the payments initiative to the debtor. A tool that should be used en masse is the electronic letter of exchange raised called LCR. Easy to use it allows to present at the due date an electronic transaction to the customer’s bank account. This requires of course that the commercial team obtains when opening the account of each client a bank account or IBAN complete.

Entrusting late payments to salespeople is a mistake. There is a real loss of credibility to one day aggressively claim a payment and then come back to try to get a new order. Late payments must be handled by the credit managers or by the accounting and financial departments.

Avoiding late payments is a matter of educating customers. If the customer finds a laxity of his supplier he will not miss to take advantage of this free credit and without guarantee that this one grants him. The supplier customer relationship must be a partnership with benefits for both parties; if the supplier has delivered an irreproachable merchandise on time, his customer must avoid any late payment and pay his bills in due time.appointment-15979__340

Mandatory information on the invoice in France

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Mandatory information on the invoice in France

Changes effective October 1, 2019 In France from 1 October 2019 two new mentions will have to appear on the invoice: • the billing address if it is different from the delivery address • the purchase order number if it has been previously issued by the buyer. The sanctions for breach of the invoicing rules are reinforced by the introduction of a fine henceforth of an administrative nature. These new provisions result from the order of 24 April 2019 recasting Title IV of Book IV of the Code of Commerce relating to transparency, restrictive practices of competition and other prohibited practices. Invoice: the mandatory information in France reminder of the mandatory information existing before 01st October 2019. The date of the invoice Date on which the invoice is issued. The invoice number Unique number for each invoice and based on a chronological and continuous sequence, without “hole”, an invoice that can not be deleted. The numbering can possibly be done in separate series (for example with a prefix per year), if the conditions of exercise justify it. Date of sale or service Date on which the delivery of goods or service is made (or completed). The identity of the seller or service provider Legal name (or name and surname for an individual entrepreneur), address of the registered office, billing address (if different), Siren number or Siret, NAF code, legal form and registered capital (for companies), RCS number and city the registration registry (for traders), number in the trade register and registration department (for craftsmen). The identity of the buyer or customer Legal name (or name for an individual), address of the customer (except opposition for an individual), billing address if different, delivery address. Purchase order number When previously established by the buyer. VAT identification number VAT identification number of the seller and the business customer (only the latter is liable for VAT). These mentions are not mandatory for invoices whose amount excluding taxes is less than or equal to 150 €. The designation and counting of products and services rendered • Nature, brand, product reference. Materials provided and labor for the services. • Specific name, quantity, unit price excluding taxes and VAT rate, discounts and other possible rebates. The catalog price Unit price excluding VAT of goods sold or hourly rate excluding VAT of the services provided. The legally applicable VAT rate Especially if different VAT rates apply, they must appear clearly by lines. Discount Rebate, rebate, discount on the date of sale or service, excluding discount transactions not included on the invoice. Total amount to be paid excluding tax (HT) and all taxes included (TTC) About the payment The date or deadline for payment, the invoice, the penalty rates in the event of non-payment on the payment date entered on the invoice and the amount of the lump sum indemnity for recovery costs in case of late payment (40 €) . Invoice: the particulars Other details must be entered on the invoice in the following special cases: • The seller or service provider is a member of a management center or an approved association Add the mention: “Member of an approved association, payment by check and credit card is accepted”. • The seller has a VAT exemption scheme Add the mention “VAT not applicable, art. 293 B of the General Tax Code “. • The subcontractor no longer declares VAT is the main company that declares it (reverse charge VAT) Mention “self-liquidation of VAT”. Indicate that this is a “tax-free amount”. • Craftsmen or micro-entrepreneurs engaged in a craft activity for which professional insurance is compulsory Mention of the insurance taken out under the activity

Corporate insolvencies how to secure you open debts.

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Corporate insolvencies how to secure you open debts. Year-to-date, corporate insolvencies in France were up 1.5% year-on-year, compared with the same month a year earlier. On Tuesday, September 10, the Banque de France issued a press release stating that between July 2018 and June 2019, corporate insolvencies increased by 1.5% in France compared to the previous 12 months (between July 2017 and June 2018). As of June 2019, the cumulative number of corporate insolvencies over 12 months reached 53,538 units, with strong growth in the transport sectors (+ 12.6% compared with June 2018), advice and services to businesses ( + 12%) and financial and insurance activities (+ 5.1%). Deficits also “appreciably” increased in education, health and household services (+ 2.3%), agriculture (+ 1.4%), as well as accommodation and food services (+1 , 3%). The number of business failures nevertheless remains at a level close to its lows of the last 10 years. Information, real estate and construction in better shape The sectors in a better position are none other than those of information and communication (-5.7%), real estate activities (-3.4%), trade (-1.4%) and construction. (-0.5%). Which have seen the number of business failures receded. According to still provisional figures provided by the Bank of France, corporate insolvencies would have increased by 0.8% over 12 months at the end of July 2019. Finally, the institution has however specified that between April and June In 2019, business failures decreased by 2.9% compared to the previous three months.

Gevo, a French collection company specializing in international B to B collection, can help you avoid the loss of your bill if you entrust your file in time.  To say that it will work out “we will wait because it always ended up paying”, to entrust the recovery to the commercial are errors. Only a professional, recovery will give you every chance to avoid a financial loss.

Internet digital world European retail business facing the Storm.

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Internet digital world European retail business facing the Storm. The European retail business has lived during these 60 past years several revolutions which have had a deep impact on its physiognomy and in our way of life and the society in its whole. The recent revolutions linked to the rise of internet and the digital world seem to take another step, it’s not the physiognomy of the cities which is changing anymore but the society in its whole.

Step 1: the neighbourhood businesses and the factories in Europe

Step 2: the birth of mass distribution and relocation of the production: the rise of the car industry

Step 3: the development of franchises, malls and pedestrianization of cities

Step 4:  Internet and the digital world desertification of the cities

In the 50s, right after World War 2, neighbourhood businesses are rising, the factories located right next to them are running in full swing. The consumers who are low motorized appreciate having nearby shops and so came several types of restaurants and services (Shoemakers, carpenters…) in the streets of the cities. In the 60s Europe knows a new type of business, mass distribution (mostly alimentary). France will be the first country in Europe to develop it, Italy and Germany being far behind. Visionaries buy agricultural land in the periphery of the cities and develop massive shops with massive parking. This type of retail will rise and create hypermarkets of 10 000m² and more with non-alimentary shopping mall around. These giants will have a significant power on the selling price encouraging industries to relocate first in Eastern Europe (Poland, Czechoslovakia…) and then towards Asia (China, India, Vietnam) where the workforce is the cheapest. The auto industry starts on the same time a massive development as the consumers going to these hypermarkets will be in the need of buying a car. From the seventies to the 2000 and despite the oil crises, a global boom of businesses in every distribution channel is rising. Independents shop retailers first partly destroyed by the mass distribution start to join franchises. The pedestrian city centre leads to the gentrification of the independent businesses. Shopping malls with several types of businesses rise. However, the bistros and the small artisans decrease. From 600.000 in the 60s, the number of bistros in France fell to 35.00 in 2018.  Investors buy commercial real estate which leads to expensive rent prices in the business areas of the cities. If in the early 2000 online shopping took its first steps, not every time in a successful way. The new giant is born: Internet and the digital world. The shops in the mid-cities are closing, the small towns are becoming bedroom communities, mass distribution loses its market shares and even the prestigious brands are shaking.  Internet digital world giants such as Amazon or Alibaba are the new nightmare of the traditional businesses. In France the legislator created legal barriers to protect small businesses, stop the development of hypermarkets and reduce their blackmail to have discounts and bigger margins. But at least the legislator is helpless toward the new giants. Amazon is the biggest supermarket in the whole world even if it is fully digitalized. It is also the biggest group purchasing organization (GPO) in the world. What if Orwell’s Big Brother was in fact Jeff Bezos (Amazon’s CEO)?  It is unquestionable that the typical businesses will need to invest in market niches in order to survive. For instance, some textile manufacturers are now aiming new consumers such as seniors or oversized people who are not yet comfortable with online purchases. Others fashion brands based their communication on the “Never out of stock” which means that the general products are always available. It is directly opposed to the fashion shops whose collections change every 6 months.

But what about payments? How to deal with unpaid invoices? Are the overdues also evolving with Internet  digital world? Even if strong habits are still here in countries like France, we still observe a massive change of the way consumers pay. During the 50s and the 60s bill of exchanges and checks were the most used way of payment. When, Mr. Moreno invented the smart card in France everything changed. Way before its neighbours’ countries, French people will start using credit cards to the great pleasure of mass distribution discovering a new and simpler method of payment avoiding the insecurity of checks and the complicated manipulation of cash. Furthermore, it is still evolving with the evolution of our phones with which we can now pay with. Debt collection firms have also professionalized their approach, for example, the procedure by a collector in the context of home visits disappeared. Courts have gone digital, it is now possible to proceed to an online payment of your court fees with your credit card. Commercial information has gone digital as well, offering business information at extremely low prices causing the end of several investigator’s jobs. What hasn’t changed is the weight and cost of legal action in southern Europe (Spain, Italy, France, Greece, Portugal…). Lawless zones emerged concerning low-amount debts. Debt collection firms will have to adapt to this new environment. It is likely that the dematerialisation of payments will deeply change the structure of the payments especially the supplier debit which may disappear. Businesses will have no choice but search for new ways of funding. In the first days of 2019 we face a dramatic situation mainly in France for the specialized retails like fashion or shoes. There is a massive disappearing of shops due of the fact that for many different reasons the consumers change their habits. For the mid-sized producers and the small shops there is only a future if they intensify their cooperation inventing new retail ways of selling.

In an Internet digital world retail cannot act as in the sixties or seventies, the actors must invest in perspective and prospective.

 

Georges Vonfelt

Payment delays : How to find 20 Billions € in France?

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Payment delays : The most recent figures and surveys in France shows that if the legal payment delays are respected the small and medium French companies (with less than 50 Million € turnover) would improve their cash flow situation with 20 Billions € a year.
The unpaid invoices and payment delays generate a lot of costs inside and outside of the Company:
Internal Management of the payment delays, costs related to the financing of the outstanding sales, debt collection costs, litigation costs.
In France the companies which are far away from the consumer are those with the most of the problems concerning the payment delays from their clients (forwarder, logistic, storage, business services)
In the Business to Business filed the costs per Invoice for the management of the payments are around 609 €!
In the Business to Consumer field the costs for the management of the payments are more or less equal to 6 % of the company turnover. The reason is that the French law exonerate the private customer from every kind of liability in relation with the non-payment of their invoices.
Georges Vonfelt
www.gevo.fr

Debt Collection in France: what is the most efficient litigation process?

anglais, Blog

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If, in the Business to Business area, you have unpaid invoices in France the first step is to try an amicable approach of the debtor. It’s the first action step for a French debt collection company.
The figures of the collection Industry are telling us that more than 90 % of the files received from a debt collection Company concern firms which are able to pay the open invoice.
Despite of those figures, the success rate of a debt collection agency for the amicable process is usually lower than the half of the received files. It’s often necessary in France to start a litigation procedure to increase the chances to collect the overdue receivables.
In the most of the cases we recommend the so called “injonction de payer” ( injunction).
How has this litigation procedure to be managed?
– The concerned Court is the “Tribunal de Commerce” located at the head office of your customer.
– The demand has to be introduced with all the documents proving the reality of the debt
o Signed order
o Signed Delivery note
o Invoice
o Reminders
o Formal Notice Sent by registered letter with acknowledgement of receipt
o Without the acknowledgement of receipt the procedure will be cancelled
– The judges are not professionals they are elected and their main business is to manage a business in the same city.
– When the “ injonction de payer” is issued you have maximum 6 months to inform the debtor through a local Bailiff
– The debtor has than one month to contest the decision, he can contest without giving any reason
– If the debtor contests it’s necessary to start a traditional legal procedure
– If the debtor doesn’t contest you have 2 months to ask for the enforceable verdict
– The court will deliver this enforceable verdict within one month.
– To seize the goods and assets of the debtor you need the help of a local Bailiff.
We recommend the cooperation with a French professional (lawyer, bailiff, debt collection agency) for the management of the “injonction de payer” procedure.
Georges Vonfelt
www.gevo.fr