Debts are an invincible part of any business. The struggle of recovering it back from the consumers is real. Things get even worse when they dodge your calls, ignore reminders and try to escape from settling the outstanding balance. Here’s a quick data check that will back up our discussion on debts - According to the New York Federal Reserve, consumer debt was approaching of 2018, (In the US alone!) $14 trillion in the third quarter If you are already writing off your international debts as bad. My suggestion is to wait and make an effort for one more time, this time follow the dos and don’ts mentioned in this guide. Let’s not forget, the higher the figure of bad debts in your balance sheet, the lesser are your chances to attract funds from investors. Facts v/s reality The most common misconception people possess about international debt that it will take you years to recover it, alongside mark stains and dents on your relationship with the client. Well, no that’s not the truth. If you follow the standard process considering all the other factors, it will cost you the shortest time to recover. Infact, sometimes you might observe your bank account being credited in a week or even less than that. Next, it’s important to retain your client post-debt-recovery also. Thus, never, I repeat NEVER threaten your clients. You can also consider professional debt collectors or debt collection agencies if you are facing a lot of hassle yourself. But, before that let me make you pre-prepared for credit offering and debt collection. What to do before offering credit? You must be aware of the procedure of recovering your debt even before you offer it. That’s right. So here’s what you must know: Run a credit check on both your existing and potential clients. It does not demand any sort of permission to run a quick financial check on limited companies. However, for sole traders, you need to seek their permission since it can affect their credit rating. This will not only you a detailed insight on the financial position of the client, but will also give you credible figures to assess like credit rating, floating charges, net worth, and even court actions and judgments which have been against them. Remember, when the discussion is about international debts, every country has a different set of laws. Make sure you are well-versed with each of them. Make your clients fill a credit application form. This will not only give you vital information about the client, like contact numbers, addresses, bank details, and other references but what you can also include is, is a basic personal guarantee. This means, in an unfortunate scenario of your client’s liquidation, or insolvency, you can pursue the directors personally. Ask for references and run a credibility check Once you have received references, don’t just blindly trust them. References can be easily forged or duplicated. So how do you know if it’s authentic? Conduct a simple internet search and analyze their presence. The referees must be present on search engines like Google, Safari, Firefox, Yahoo, and Bing. Check their website and see whether it is genuine or not. Match the phone numbers and don’t shy away from asking a line-up of questions on a mutually decided time frame. Questions like, how long have you been trading with them? What is their usual turn-around time for payment? What is their process of payment? Ask everything that been probing in your mind, it will give you a clear picture of their financial behavior. A thorough initial research will take you a long way. Why haven’t you been paid? Before you follow the process ahead, you must be aware of the reasons for default or late payment. If it is an undisputed amount, the reason most likely is that your client is in some financial issue or is experiencing cash flow difficulties. And if this is the scenario, it’s highly likely that they are stuck in the same situation as you that is they are not getting paid from their suppliers either. It is your duty to know about them. You could search business forums for intelligence. You can also consider speaking to some of your peers. However, it’s high time you start pushing the cycle. Revisiting the same credit control process will not give you your money. If your first reminder letter or call has given you no results, it is very likely, the third will also fetch you the same disappointment. Meanwhile, another supplied backed up by expert debt collectors, will recover his payment. Debt collectors v/s Lawyers Before things go out of your hand, it is best advised to that have a proven track record of recovery. You will certainly find lawyers or solicitors offering you the same kind of service, but the major setback in hiring them is the hefty costs. For instance, a good litigation solicitor in the UK can charge you anywhere near 250 to 450 euros per hour. hire debt collection agencies Debt collection agencies, on the contrary generally work on the basis of no collection no fee. Never fall for traps like admission fee, upfront fee or registration fee. Reputable agencies with an established name in the industry will never ask you for that. So it’s always advisable to run a background check on your debt collectors, like the way you did for your clients. How to know if your chosen Debt Collector is authentic? As mentioned above, once you are through a background check by yourself. Reach out to their previous or existing clients and ask about their experience. Your final pick must be the agency that has been in the business for quite some time now with the highest success rate. Lastly, before the paperwork gets involved for the final stage, go through the terms and conditions thoroughly. The payment terms, procedure, rates everything should be clearly stated. Ensure there are no hidden charges involved. In international debts, debt collectors also vary on the basis of the location. But the ideal debt collector for you should be the one that fulfills all the above conditions. International debt recovery can be very complex considering the different governments involved each with its own set of terms and conditions, thus it is best rested in the hands of professionals
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The Beginner's Guide To Handle International Debts

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