The strict meaning of the word 'debt collection' limits it to actions taken to enforce payment or other rights by legal means as defined by the applicable legislation. In my opinion, however, good debt collection starts much earlier - as the relevant procedures, agreements or habits have a direct impact on the very collection of one's debts.
Adequate verification of the customer and their current financial situation prior to the sale of goods, established procedural steps and their observance, such as concluding a contract, taking care to confirm receipt of goods, having proof of fulfilment, delivery of an invoice.
Operating according to established verification and sales procedures will allow the exclusion of some unreliable counterparties from the very beginning of the cooperation, and the materials collected will make it possible to claim receivables in court without problems.
A valuable contract is one that both parties understand. This does not mean that it has to be short, nor does it mean that it has to be overly detailed. The point is that it should realistically describe the obligations of the parties and the procedures to be followed, e.g. ordering, delivery and receipt of goods.
In addition, good contractual provisions can promote liquidity and discourage customers from postponing payment. One potential solution, for example, is to obtain an additional discount provided the invoice is paid in advance. These issues should be tailored to the industry in each case. However, it is important that the provisions do not violate the Act on Combating Unfair Competition in doing so.
There are a multitude of possible performance bonds. Some involve additional costs (e.g. bank guarantees), others are completely free (e.g. assignment of receivables). It is always advisable to analyse which securities will be adequate for the contract to be concluded and to renegotiate the subject with the counterparty.
Responding quickly to non-payment is crucial. Firstly, it will allow possible other sales to that counterparty to be put on hold and reduce possible risks; secondly, counterparties are then more willing to cooperate and, for example, increase collateral or make appropriate declarations of intent. Most importantly, however, a quick response and the prompt initiation of enforcement proceedings offers a greater chance of success.
The pre-court procedure has several elements that involve both reporting the debtor to the debtors' register, conducting mediation talks and preparing for the proceedings.
Experience and knowledge of the market and the counterparty are important here - companies need to know at what point they can make concessions (e.g. instalments, postponement) and when to say 'enough' and go on the offensive in court.
If the previously mentioned steps are followed, court proceedings will be a mere formality. It is worth pointing out that even in the case of contracts that will not have safeguards (e.g. due to the buyer's negotiating advantage), it is possible to organise the evidence in such a way (in accordance with the implemented procedures referred to in paragraph 1) that it will be possible to obtain an order for payment under injunctive proceedings.
Warrant proceedings are not only cheaper (1/4 of the normal court fee) and quicker. The order for payment in these proceedings constitutes a security title, so there is the possibility of securing against the debtor's assets even before he becomes aware of the court case against him.
First of all, it is the debtor who is obliged to pay the objections to the payment order - this effectively discourages entities who, although they know they will lose, want to extend the time.
Enforcement proceedings are of course carried out by a bailiff. However, it is the company that knows the market, may have information about the counterparty, his other investments or contracts. It is the creditor who has had the opportunity to get to know the debtor and, in informal conversations, the opportunity to learn about his assets. Of course, this is not the rule, but there is a chance that the creditor may know something that will greatly assist in the recovery of the debt. It is worth sharing this knowledge with the attorney or debt collector - because you never know whether this very information will determine the effectiveness of the entire recovery.
===========================
