Collection costs and challenges in Europe
Today, we focus on the challenges of international international debt collectionand in particular the problems that companies may encounter in the event of non-payment to companies in Europe.
The challenges of international debt collection in Europe
When it comes to international debt collection, Europe presents a unique set of challenges and issues for companies.
Language barriers and unfamiliarity with local customs
Companies can face difficulties due to the diversity of languages and cultures in Europe.
Effective communication with debtors in other countries can be a challenge.
Different contractual payment terms
Payment terms vary from country to country in Europe, and it is essential to ensure that the customer understands and respects these terms to avoid non-payment.
Variable payment delays
Late payment rates vary from country to country in Europe.
It is important to be aware of these variations in order to anticipate the risks associated with late payment and non-payment.
For example, a study by Altarés shows that Portugal has an average late payment rate of almost 24 days, with only 20.1% of payments made without delay, while the European average is 49.9%.
Financial risk associated with a defaulting company
It is crucial to carry out a thorough check on the financial health of the debtor company, because in the event of default or bankruptcy, recovery of the claim becomes extremely difficult, if not impossible.
One-off recovery requirements
Fortunately, not all international contracts end in arrears.
For example, some companies have one-off collection needs that don’t fit the subscription models offered by many international collection companies.
International collection costs
International collection costs vary according to a number of factors, including the nature of the debt, the country in which the debtor is located and the services offered by the collection company.
Single or success rate
Some international collection companies charge a fixed fee for their services, while others operate on a success fee model, which means that they charge a commission only if the debt is successfully collected.
Subscription vs. one-off
Some companies offer subscriptions, while others allow you to handle one-off collection cases with no long-term commitment.
Why use an international collection agency?
Many foreign companies tend to take advantage of poor management on the part of creditors.
If you don’t dredge up your receivables, you’ll have little chance of recovering your unpaid invoices.
Kreancia is able to offer a unique pricing model throughout SEPA, based on success. You don’t need to take out an initial subscription.
Thanks to the Sekundi network, we have local representatives in all European countries and in over 30 countries outside Europe.