Business Debt Collection

Reduce Outstanding Liabilities & Secure Liquidity

B2B debt collection for companies

Open receivables, larger outstanding payments, damage compensation claims, and value adjustments for defaults (bad debt reserves), etc. pose a real threat to liquidity, profitability, and sometimes even the existence of a company. Consider situations such as the following:

• Despite multiple reminders, a major customer still hasn’t paid. Sending payment reminders and initiating legal proceedings costs you money, time, and energy.
• A contract partner fails to fulfill their contract, causing you quantifiable damage.
• You suspect a cooperation partner is incorrectly settling accounts with you.
• You don’t want to drive a debtor into insolvency through legal action, thereby increasing your losses, and are looking for a “smarter” approach.

For smaller claims, undisputed or titled claims, especially with consumer debtors, conventional collection agencies are the right partners. Business debt collection for larger amounts and more complex claims or international cases is a category of its own. Here, individual case and legal analysis, in-depth investigations, and a case-specific collection strategy are required.

This includes:

• Debtors who have “disappeared” and must first be located
• Employees who have stolen from the company
• Customers and cooperation partners who do not honor contracts
• Or those who have damaged your company through criminal actions
• Etc.

Differences Between Collection Serviceproviders

Which serviceprovider fits your case best

The examples mentioned have already shown you that we would not be the right partners for all types of business debt collection, but we have our specific niches where we can bring you the greatest possible benefit. The most important provider categories in debt collection that should be distinguished are:

1. Factoring-Companies
2. Conventional collection companies, “collection agencies”
3. Attorneys
4. Specialized collection companies, “debt collectors,” which include Inkasso-Team AG, and in some cases detective agencies

Here is a decision aid. Note: The classification is not definitive and also depends on the expertise, experience, and focus of the individual collection service provider.

*Also practiced by attorneys, although their core competency lies in litigation-based enforcement. **International law firms and companies with an international network.

The table shows little clear distinction between attorneys and specialized collection companies. The difference here lies primarily in the cost model. Attorneys work on a time and materials basis, which is partly regulated, with an advance payment typically required. Specialized collection companies work on a success fee basis, with reputable providers requiring an advance payment against this.

Attorneys are also clearly the right choice when it comes to evaluating more complex legal questions or when claims must be pursued through litigation. Specialized collection companies are more appropriate when in-depth investigations are necessary or when collection must be conducted through interventions and negotiations on site.

Always a central question 

What are the cost?

Factoring and conventional collection agencies operate a high-volume business with standardized processes. They can cover their expenses through basic fees and percentage-based success commissions. Attorneys have a higher, highly variable workload per case and work as pronounced specialists with sometimes high hourly rates. Once the retainer is exhausted, they bill for additional work on an ongoing basis. For lawsuits, court fees are added, which can be very high for high-value disputes depending on the country.

Specialized collection companies work on the basis of a success fee, against which an advance payment is typically required. At Inkasso-Team AG, the advance payment is also offset against the success fee; in case of success, this represents the maximum cost amount. In case of failure, the maximum costs consist of the advance payment. As a special feature, Inkasso-Team AG commits to taking on cases for an unlimited period, thus waiving its right to terminate except in defined exceptions. In other words: We share in the costs and risk by continuing to work on the case even when the advance payment is exhausted, a patience that often pays off.

Offers purely on a success fee basis, without advance payment should be viewed critically. While they may appear attractive to the client, they entail a risk. If a case doesn’t prove straightforward or takes longer, such collection companies may be tempted to “file away” the case.

The Strategy in Accounts Receivable Management

How do we approach business debt collection?

Analysis of the claim case is particularly important in business collection:

• What is the legal basis of the claim?
• What is the business-professional and financial situation of the debtor company, or a private debtor?
• Are there starting points to support negotiations with the debtor through legal pressure scenarios?

Our analysis is based on many years of experience in accounts receivable management/business debt collection. Several team members have experience as business consultants or independent entrepreneurs.

Our research and investigations focus on the financial situation of the debtor company or a private debtor. In addition to in-depth online research, this phase also includes on-site activities (inspections, covert surveillance, etc.).

On this basis, we develop a case-specific collection strategy. It is evident that such cases cannot be resolved with a standardized approach. The core of our strategy often consists of maneuvering the debtor into a situation where it becomes more advantageous for them to reach an agreement with us and pay.

As a supporting measure, we resort to civil and criminal legal proceedings where it is reasonable or necessary for substantiating disputed claims. To the extent we are not authorized to do this ourselves, we work with attorneys who are familiar with our methods. However, it is the explicit goal of our collection efforts to secure payments through forceful negotiation beforehand.

The benefit is obvious: It costs you less and happens faster. You avoid years of litigation at the end of which, even if you prevail, you don’t necessarily have money, but rather a piece of paper. Often enough, the collection then begins anew, only the debtor has had all the time in the world to prepare for it.

Case Examples for Business Collection

The crafts sector

Debt collection for craftsmen

As a tradesman, you know how annoying it is when customers simply don’t pay or question the service provided.

The invoice, including your reminders, is often ignored. When you call, the “responsible person” is not available. On the construction site, the customer, or the site manager, claims to have known nothing about it. Outstanding payments for work done is a recurring problem in the trades, which typically leaves conventional debt collection agencies and lawyers bogged down in bureaucracy without success.

They don’t have the time or the nerves to deal with these unpleasant customers. With our business debt collection service, we take care of this so that you can concentrate on your day-to-day business and customers.

Our expertise in debt collection secures your liquidity, saves you nerves, and is the better choice for large sums in particular. Contact us today, your money should be worth it.