Managing overdue payments: what to do in the event of late payment?

Step 1 - Amicable conciliation (call, email or letter)

In the event of late payment, the first step is to contact the customer in a direct and friendly way.

A simple call, email or letter can be enough to defuse the situation.

Rappelez-lui amount due and past due date . It's also the time to make suggestions, if necessary, an adjustment schedule.

The aim is to maintain a constructive dialogue while providing a clear reminder of its obligations.

This step often makes it possible to solve the problem without resorting to more formal or confrontational actions.

Step 2 - The dunning letter (template included)

If the informal reminder remains unanswered, move on to a written reminder letter. This letter formalize your request while maintaining an amicable approach.

Clearly indicate :

• Unpaid invoice references

• The amount due

• Initial maturity date

• Consequences of non-payment (penalties, suspension of services, etc.).

These formal reminders strengthen your position if the case evolves into legal action.

They can be sent by post or e-mail, depending on your exchange habits with the debtor. Remember to keep a duplicate for your archives.

Step 3 - Formal notice (registered letter with acknowledgement of receipt)

If previous reminders fail to produce any results, it becomes essential to send a formal notice. This formal letter, addressed to by registered mail with return receipt, is a final summons to pay before taking legal action.

The formal notice must specify the exact amount of the claim, the payment term granted (generally 8 to 15 days), as well as consequences of non-payment (interest on arrears, legal action, etc.).

It demonstrates that the creditor company has tried to resolve the dispute amicably, which is often required by civil courts.

Step 4 - Injunction to pay (quick and easy procedure)

In the event of non-payment after formal notice, you may initiate the following legal proceedings a payment order procedure to the competent commercial court.

This fast, no-hearing procedure enables you to obtain a writ of execution if the judge deems the claim to be well-founded.

Once the prescription has been obtained, it is served on the debtor by a commissioner of justice . If no objections are lodged within the deadline, it becomes enforceable.

Step 5 - Recourse to a judicial commissioner or collection agency

If legal proceedings are not sufficient to obtain payment, you can appoint a commissioner of justice to enforce the order :

• Seizure on bank account

• On receivables

• Etc.

You can also use a collection agency who will proactively take charge of the file, following up with the customer and possibly negotiating a payment schedule.

What tools are needed to automate the management of unpaid bills?

To save time and reduce human error, it is possible to automate part of the management of unpaid invoices using digital tools and insurance solutions.

Billing and reminder software

Tools such as QuickBooks, Sage or Sellsy allow you to :

• Automate reminders

• Keeping track of deadlines

• Generate reminders in just a few clicks.

Some even include dashboards for view accounts receivable in real time.

These solutions are ideal for for companies wishing to improve administrative efficiency.

Insurance and factoring

Credit insurance provides protection against non-payment. In exchange for a premium, the insurer covers all or part of unpaid invoices.

Factoring enables you to delegate the management of your accounts receivable to a third party. A factoring company buys the company's receivables, advances all or part of the sums due and handles collection.

The company is then relieved of the burden of managing unpaid bills.

Who should you turn to in the event of persistent non-payment?

If amicable and legal approaches fail, you can call on the services of professional debt collectors to recover the sums owed in a controlled and efficient manner.

A collection agency

A collection agency can intervene as early as the amicable phase to try to recover your unpaid bills. without going to court.

These professionals have the expertise needed to manage complex receivables and multiply dunning channels :

• Apples

• Mail

• Negotiation

Their activity is governed by a strict legal framework to protect both parties. They are generally success-based or commission-based .

A judicial commissioner (formerly a bailiff)

A judicial commissioner (formerly a bailiff) is a ministerial officer empowered to intervene at all stages of debt collection, from the amicable phase through to enforcement. He can issue a summons to pay to encourage professional debtors to regularize their situation before any legal proceedings.

Once an enforceable title has been obtained (order for payment, judgment, etc.), it is the only professional authorized to serve the decision and to implement enforcement measures, such as seizures on bank accounts, business equipment or other assets.

It can also be contacted directly under the simplified collection procedure for receivables under €5,000 without going to court.

Its intervention guarantees strict compliance with legal deadlines and procedures, which makes collection more secure for companies.

A specialized lawyer

A lawyer specializing in business law and debt collection can supporting the company from the very first contestation by the debtor .

Its intervention is particularly recommended for complex disputes, large claims, or when collective proceedings are in progress (receivership, compulsory liquidation) are at stake.

He also defends the company in the event of a dispute before a judge.

How can we prevent this from happening again?

To limit the risk of non-payment in the future, you can put in place effective preventive measures.

Here are some examples of practices to adopt:

• Regularly update your terms and conditions . They must precisely reflect payment terms, late payment penalties, and procedures in the event of non-payment. This avoids legal grey areas.

• Carefully select your customers . Remember to systematically check the solvency of your customers before concluding any contract. You can analyze their latest balance sheets, consult payment incident databases (such as Coface or Altares), and find out about their reputation. If necessary, ask for payment guarantees: down payment, bank guarantee or credit insurance.

• Automate reminders from the first day of delay . Many software programs allow you to send reminders automatically, thus avoiding oversights and keeping the pressure on from the outset.

What to do if a customer refuses to pay?

If a customer disputes the invoice or clearly refuses to pay, start by compile a complete file These elements are essential in the event of a dispute. These elements will be essential in the event of litigation.

Depending on the situation, an attempt at mediation may be taken to avoid recourse to the courts. In any case, never take unilateral action or commercial reprisals, or you may be penalized.

Only a judge can order binding measures, which are then carried out by a judicial commissioner.

Is it possible to charge late penalties?

Yes, as long as your general terms and conditions of sale (GTCS) or the contract include a clause to this effect. The amount must comply with the legal interest rate or the rate indicated in the GTCs if more favorable.

You can also charge a fixed indemnity for collection costs of €40, applicable ipso jure in relations between professionals.

Is there a minimum threshold for initiating legal collection?

No minimum amount required to take legal action against a professional customer.

However, the costs incurred (bailiff, lawyer, court) must be proportionate to the amount claimed .

For small claims, it's best to opt for the simplified collection procedure, the payment order or an attempt at prior mediation.

Heropay is the solution to avoid overdue payments and secure your cash flow

Anticipating late payments is even better than having to deal with them. With Heropay you benefit from an all-in-one solution for secure your cash receipts , automatiser vos relances and finance your invoices in case of need.

Whether you're a freelancer, a small business or an SME, HeroPay helps you preserve your cash flow thanks to :

• Un collection by payment link or on your site from 0.4% commission,

• Le instant financing of your customer invoices up to €50,000, without going through a bank,

• From fast transfers and a pro account with interest of up to 5% for the first two months ,

• Tools for centralize your accounting documents and track your payments in real time.

Managing overdue payments is based on rigorous organization and appropriate tools. By acting quickly and professionalizing your procedures, you limit the risk of cash flow stoppages. Formalizing your payment terms and anticipating delays will help you secure your business over the long term. In the event of persistent disputes, you can rely on the right partners to defend your rights.