Best practices in international collections

How can you protect yourself against non-payment abroad?

Before entering into any business relationship with a company, it is always important to check a few key indicators concerning that company, and to protect yourself against the most common situations, thanks in particular to your general terms and conditions of sale or your contracts.Here are a few tips on how to protect yourself in advance when dealing with a foreign customer.

Protecting yourself with terms and conditions and contracts

In the context of an international relationship, the complexity of your work lies in understanding your service and your responsibility to the customer.
You’ll need to contractualize the terms and conditions of the relationship, and make them visible to ensure its success.

Draft and contractualize the relationship, with your CVGs and contracts available in your customer’s language, or at least in fluent English.
Your customer needs to be aware of the commitment he is making to you, and understand the consequences.

International invoicing rules

If the company is located in a country other than your own, the commercial rules applied will be different.
If amounts are mentioned in contracts, specify the monetary units and the rules applicable to late payment penalties, as well as VAT, for example.

International invoicing: Focus on VAT

Please note that the rules applicable to for French VAT will differ depending on the type of business: sale of goods or provision of services.Note that French VAT does not apply to French products or services sold in non-EU countries, so you don’t need to charge it.

For trade within the European Union, French VAT applies in most cases, unless certain conditions are met by the buyer and the terms of the relationship.
If your customer applies for VAT exemption, it will be your responsibility to check whether his application is eligible.

Assess your customers’ creditworthiness

Finding information about your future customer is not easy enough when the company is located in your country.
However, it’s up to you to check the company’s history of non-payment, debt or legal decisions taken against it.

You need to check the company’s figures, the group to which it belongs, and possibly information about its manager.
In fact, you need to carry out a complete analysis of the customer before entering into a relationship.
Scoring, offered by some companies, can be used to obtain a company’s credit rating based on a number of indicators.

Finding information on international companies can be more time-consuming than for companies based in France.
That’s why it’s advisable to obtain your information from specialized companies with European or even global databases.

Successful international invoice collection

If, despite all your precautions, you find yourself in an unpaid situation, you can still take action against your debtor.
Here are a few tips for successfully collecting your bill abroad.

Understand your customer and be understood

The main problem is the language barrier.
Even if you are competent, you may not be able to understand all the subtleties of a foreign language.
And yet, when it comes to collections, the subtleties of language can be very important.

It’s essential to understand your customer’s feedback, his explanations, and possibly his reasons, in order to find common ground. All this is only possible if you have a relatively good command of the other person’s language.

A international collection company has collection professionals who can communicate with your debtor in any language.

Understanding cultural differences and collection laws

Another important point concerning collection and foreign receivables: the specific features of debt collection in each country.
We need to look at the reality of debt collection in each country, both amicably and judicially.

The rules, laws, business practices and customs that apply to international debt collection are those of the country where your debtor is located. You must therefore comply with them and be aware of them.

Act quickly on unpaid international invoices

Time is the enemy of debt collection, even more so in international business.
The longer you delay taking the necessary action, the less chance you have of recovering payment of your invoice ( business failure). To act quickly, you need to :

• Prepare a complete file of your claim;
• Make regular amicable reminders by telephone and/or mail;
• Find collection professionals in the country of your debt;
• Take legal action if the amounts to be recovered are sufficient.

 

Advantages of companies specializing in international collections

Calling on a collection company with an international network offers you the opportunity to overcome the obstacles mentioned above.
Efficient debt collection is only possible if it is carried out and managed by an international company operating in the same country as the debtor.SSP Collect has local partners throughout the world who can intervene on site to collect debts amicable collection abroad as for legal collection.

As a company based in France, your contact will be French, but the file will be co-managed by a local expert in your debtor’s country.
This local contact is collection expert in the country in question.
He knows all the peculiarities, customs and legal subtleties of the country where the debtor is located, so as to guarantee you efficient debt collection.