Tag Archives: # unpaidbills

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

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

90 % of the French B to B debtors with unpaid bills are solvent!

anglais, Unpaid debt,

90 % of the French B to B debtors with unpaid bills are solvent but the success rate of the debt collection agencies and organizations in charge of the receivable collection are largely lower.
What are the reasons?
First of all it’s the way the debt collection industry is organized. The no cure, no pay policy largely practiced brings a focusing from the collector on the larger files. To collect 100 € or to collect 1.000 € it’s the same job, the same time investment but not the same earning. The market (the companies’ client of the debt collection agencies) would never accept to pay a 10 time higher fee to collect a small invoice. The bigger the file the more the debt collection specialist invest time and costs on it.
Other reasons in France are the difficulties to get legal decisions with acceptable fees for the benefit of the creditor. The French government is actually thinking about new dispositions in favour of the reduction of the payment terms. To apply the existing laws would be very helpful and sufficient. For some mysterious reasons some courts are very sensitive for the matter of the recovery costs. We don’t need new laws we need first the application of the old ones.
How to reduce the gap between the 90 % solvent debtors and the percentage of collected files is the goal of the debt collection industry in the near future. It’s difficult to accept that billions of overdue disappear every year because we are missing adapted tools and services.
Georges Vonfelt
www.gevo.fr