risk unpaid

The scenario of commercial defaults in Europe will undergo changes during 2019

The latest trends in the granting of credit of all kinds in the form of policies and lines has triggered traffic in commercial transactions by more than 15% compared to last year.

This growing trend in the volume of business experienced by companies and self-employed in our country, leads hand in hand an increase in unpaid effects as it responds to a historical trend.

Caution Extreme precautions in the credit offered to clients

As we mentioned in our previous article: Things to keep in mind before turning a bank charge to a new client, it is vital to know how to increase our sales without defaults doing so directly proportional to our business volume.

To this end, the accounting and finance departments should exercise extreme caution in granting credit to clients as well as in the maturities condemned.

risk unpaid

It should be noted that in the golden age of the global economy (back to the years 2003-2007), there were volumes of unpaid defaults to date as the cash flows that existed in those years were exorbitant and the high default ratings that occurred in those years, it was precisely because of not establishing delinquency policies within companies.   commercial defaults .

The principle of a higher billing, greater debt

Obviously, as we mentioned in the previous paragraph, there is a directly proportional relationship between billing and debt. This means that the risk of debt increases when our client base is larger.   And in the same way, we are increasing this risk when the invoices we issue to our customers are high in amount. It is the moment in which the possibility of a non-payment by bank receipt at the expiration fixed in the payment of the invoice is evaluated.

This moment of uncertainty in the collection of the balance, depending on the volume of our business, can be disastrous if the amount billed can cause a mess in our financial muscle.

Do not issue invoices at expiration that exceed 10% of our treasury

One of the most common reasons for bankruptcy is the failure to comply with this statement. Many companies and professionals have not managed to manage this situation having taken their business to ruin for a single unpaid bill that they have not been able to hold.

Example: Let’s imagine that a company has a € 30,000 box. Issuing a € 15,000 invoice to a customer at expiration is the counterpart to playing Russian roulette; We start from the basis that this company had to pay the payment to its supplier for an amount close to this invoice, which results in a high impact on the treasury of the company receive a default on this invoice, thus not being able to take care of to other payments to suppliers, which causes an accounting squeeze from which it is very difficult to leave for business continuity.  

Purpose for 2019 ?: Caution

In Cobratis we accumulate enough experience in the sector of non-payments to be able to affirm categorically that less is more. In conclusion, we can say that Discounts for early payment, separate large sales in small bills charged in installments with independent maturities and reward payments by bank transfer are just some of the accounting practices that we can use to limit the maximum risk of defaults that companies and professionals of our country will suffer in a not insignificant way during the present year 2019.

bank account

Things to keep in mind before turning a bank charge to a new customer

Bank charge to a new customer?

Often we do not know how to decide what is the appropriate payment method with our clients, although it is true that the greater the range of possibilities that we provide to our clients, the greater the facilities we will be providing to expand our portfolio.

However, it goes without saying that some types of bank charges involve a risk of default that always varies depending on the amount we are turning to the client, the history we have of this.

Offer the banking charge to a new client

This is the eternal question that gives the biggest possible headaches to the administrative and accounting departments of companies.

bank account

Obviously, the recruitment of new customers depends largely on offering more facilities and payment methods to these, so the bank charge may be the most convenient way to settle the payment of bills despite the fact that it entails a risk.

Is it advisable to offer the bank charge to a new client in the first instance?

Due to our experience in charging incidents of this type, the answer to this question is not completely clear. While it is true that there is a certain degree of distrust and uncertainty when offering this form of payment to a new client, in this way, we will also be getting a new opportunity to expand and improve our client base, which in the end They are what determine the annual volume of our business.

Select customers

If we want to avoid encountering the unpleasant surprise of a first default produced by a new client, perhaps it is a good exercise to make a first selection of those customers to whom we wish to offer this form of payment.

For this and starting from the basis that they are new customers, if we have ignorance of their trajectory as debtors or their payment behavior, we can accept something as simple as checking if this company is also host to a similar debit collection system to Cobratis Spain.

Start little by little

After the reform of the bank receipts that were established in the old notebook 19 of which we already reported in the past year 2014 (it has already rained), this new European format that was called CORE became very popular.

The basic problem that also dragged this option was that it had exactly the same limitations as its predecessor made in Spain notebook 19: TWO MONTHS TO RETURN THE RECEIPTS.

For this and that could be limited to a large extent, a system of bank charges was developed that eliminated this problem in the defaults, it was called the B2B Booklet that we also explained previously.

Although this notebook seemed to be the most appropriate to end undesirable situations of default, its lack of operation as well as the need to be regulated by a mandate that had to be signed in a handwritten form by the two parties in the bank, rest fluidity, speed and operability to the process, being the CORE format the most used and extended nowadays, despite the risks involved in its use.


Unpaid bills unclaimed and their impact on our treasury.

Many companies that do not claim their unpaid bills, do not know that the fact of not claiming the collection of these defaults, represents a significant potential loss of liquidity for the company since even today they do not get to claim more than 60% of unpaid bills in general terms.

This translates into many thousands of millions of euros that remain in a state of default and that had they been claimed by their creditors, a large part would have been transformed into new treasury for the business.

Unclaimed invoices?

There are many unpaid bills that accumulate dust in the drawers and files of the administration and finance departments. What few administrators and accountants contemplate is the possibility that it can be converted into new liquidity and treasury for the company.

unpaid invoices

The statistics are devastating and it is more than proven and verified that the vast majority of businesses in our country have or have had unpaid invoices that have not been claimed before the debtor.

However, many other companies already have what is called a “zero tolerance” to the defaults of customers coming to claim the debt at the time it comes to occur in a first bill and although the amount that this involves is reduced quantity.

How can I charge them?

To collect unpaid bills there are many methods and techniques that can be internal or external. It is vital that from the company itself you start to have the necessary training for the recovery of unpaid bills.

Counting on the fact that there are always customers who are going to ask us about payment problems, having a protocol for collecting unpaid bills will help us to collect our unpaid bills internally and in an effective manner.

However, it is not always effective in this task of internal recovery and in many cases in which a specialized research company has been developed to help us in the external phase of the recovery of our assets and the non-payment of our invoices.


There is a great offer of collection companies of defaulters, recovery of unpaid debts, as well as legal cabinets specialized in collecting debts and defaults.

Depending on our interests as creditors, we can choose the company that best suits our needs.

An unpaid invoice is always a damage to our treasury and the accumulated of this type of incidences, you can find bigger problems for the management of our business and even the bankruptcy of the same and the unpaid invoices are of an amount that you can have financial muscle.

Having adequate debt recovery practices and being clear in the collection of our bills makes us strong creditors to potential debtors and reduce the risks of future defaults

The necessary documentation to be able to claim the collection of a debt

Maybe at the time of making the decision on the initiation or not of a judicial route, we consider the viability in the collection of a debt or if, the justifying documentation with which we have is enough for the filing of a claim amount.

In this article we will analyze what are the guidelines to follow in these cases in addition to the actions to be carried out for the issuance of supporting documentation that makes our claim prosper before the courts.

What is a documented debt?

That debt that is attributed to the documented nature is that which contains supporting elements that can demonstrate that this debt in the first place exists, is in force and that in turn is legitimate.

So that we can affirm that the debt exists, we have to have supporting documentation, that is to say; Documentation that reflects that the amount on which we are filing the claim of the unpaid is completely visible and is shown in breakdown of each and every one of the documents that will be part of our file.

The greater the number of documents and the broader the foundation of the base of our file, the greater the chances that we will have the court to approve our claim and allow us to process our file.

Which are the requirements?

To talk about requirements, first we have to know if our debt has a legal basis to be processed.

For this we can go to our help center to know if our debt can be managed for recovery or not.

However, in general terms we can say that for a debt can be processed, it must be liquid, due and enforceable.

Liquid: Make it a debt of money.

Expired: That the payment deadline established with the debtor has expired and that, therefore, we can demand the recovery of the debt.

Exigible: This is the point that now concerns us since it is the requirement that obliges us to have documentation that supports the legitimacy of our credit balance.

How to carry out the collection of defaulters in old invoices

Understanding the problem

Some companies with unpaid arrears of years ago, have not yet claimed the recovery of these bills and still do not collect these balances in favor and that have not been liquidated to date. The collection of defaulters of old invoices is conditioned by several factors.

It often happens that misinformation in these cases plays a crucial role since assiduously these old defaults are not claimed due in large part to the few expectations of collection of the debt with which the creditor has.

What is an old debt?

When we talk about old debt that this debt in the first place exists, it is in force and that in turn is legitimate. The collection of debt defaulters of this type comes approximately fixed in defaults with an age superior to 5 years.

As of this date, many creditors simply pass on these balances to losses and leave these balances for lost without taking them to claim.

collection of defaulters

We always advise you to carry out the collection procedures of relevant defaulters and oriented to the recovery of these assets since in many occasions, we can obtain a title that allows us to execute and seize assets to our debtor as soon as it has liquidity available or patrimony with which to face the payment of our debt.

Is its collection feasible?

To claim a debt there are a series of basic requirements that allow us before the law to claim the balance owed to us today.

Once we have fulfilled these requirements, our debt can be processed without problems. Initially through the friendly way and later making use of the judicial route if friendly it is not reached an agreement of payment of the debt.

The problem comes when the old debt makes it difficult for us to have an accurate knowledge of the current whereabouts of the debtor or if this is a company, if at present it has a commercial activity or not.

In any case, it is always advisable to try to collect the debt as it may be that although it is not immediately and we take a while, we may in the future have a collection right in our favor through a final court ruling.