Like many Dutch entrepreneurs, are you struggling with customers who simply don't pay or pay very late? Naturally, that is unpleasant and has a major impact on your business's cash flow. Fortunately, there are things you can do to collect your invoices faster, without having to constantly hire a collection agency or lawyer.
Invoice discount for prompt payers
You don't always have to resort to consequences and legal documents to get customers to pay faster. For example, you can also grant a discount for timely payments. The customer then receives a discount if they transfer the amount due within a certain period. Moreover, this is always beneficial for the customer because they have to pay less VAT, even if they were to pay late.
Good general terms and conditions
With an invoice discount, you offer rewards for prompt payers. On the other hand, you can also cautiously threaten consequences. And this is where general terms and conditions an important role. For instance, you can specify in your general terms and conditions the consequences if your customer pays late (or not at all). Consider, for example, a fine, without excluding the possibility of charging higher actual costs. The available options vary from company to company. For instance, it could also be an option to temporarily suspend or to reclaim the delivered product (invoking retention of title). In any case, the pressure on the defaulting payer increases if you have good general terms and conditions.
Be quick off the mark
Prevent your customer from thinking that you are not taking the due date seriously. Make a quick phone call immediately after it has been exceeded to see if anything went wrong. Still no response? Then you can call or send an email. Still no response? Eventually, there is a limit, and you will have to take action. That always starts with a written notice of default. It is a necessary condition to be able to claim compensation.
Are you dealing with a client who honestly admits they are experiencing financial difficulties at the moment? Then assess whether a solution is desirable. Consider granting a payment deferral or the option to pay in installments, possibly in combination with a guarantee. You could potentially waive (part of) the debt, provided the client adheres to a number of agreements. In that case, you can at least reclaim the VAT paid. In any event, you must always formalize such agreements in a watertight contract . Here too, the rule applies: be quick to act if the client fails to comply with the new agreements as well.
Limit the damage
If you cannot reach a solution, there will be no other option than to take legal action. However, bear in mind that payment for other assignments may also be jeopardized. Therefore, request an advance payment or full payment for new assignments. It is also advisable if your general terms and conditions state that all amounts become collectible once one payment term has been exceeded. This allows you to take immediate action on all your invoices and avoids having to wait until all payment terms have expired.
Let's talk about your documents for a moment
Not only are good general terms and conditions crucial if you want customers to pay quickly, but you must also always put subsequent agreements in writing and send a written notice of default. Only with the right documents will you not only eventually receive your money, but also quickly. Therefore, discuss this with one of our legal experts. Schedule a free intake consultation.
