English: Loan payment schedule of a 1-year, fixed-size payment loan with 3% monthly interest. Shows the accumulation of the interest, the payments and how much of the total cost consists of interest. The effective annual percentage rate is calculated. (Photo credit: Wikipedia)
How to Track Down Debtors Around the World
It is becoming less and less common for businesses to know their customers personally, especially if those customers live on a different continent. There was a time when companies only did business with their neighbors, people with whom their kids went to school. The internet has made it possible now to have customers who do not even speak the same language you do, much less have the same laws. While such a global economy has proved beneficial for many, it is not without its challenges. When laws vary by country, how will your company enforce contracts when payments are past due?
Regardless of whether or not your company does business internationally, there should be debt collection procedures in place to prevent your company from simply taking a loss when debtors try to avoid payment. For many companies the debt collection process looks something like this:
· Payment due date is passed so a second notice is sent to remind the client to pay in case it was simply an oversight.
· If there is no response after the second notice, someone from accounts receivable tries to reach the client by phone.
· When unable to contact the client by phone or email after a month or more, smart businesses will pass off the recovery responsibility to a debt collection service.
· Business as normal resumes while the debt recovery professionals track down the debtor for payment. This frees up the accounts receivable personnel to tend to other daily duties.
When it comes to international debt collection, there is an even greater advantage to using a professional agency: connections. A local company cannot afford to chase debtors across the globe or navigate international law. Their efforts are better suited caring for customers who do pay on time while the debt recovery company does the heavy lifting.
Instead of using one person to track down one debtor anywhere in the world, debt recovery professionals rely on a more efficient practice of networking. Using specialized resources to determine the location of a debtor is a good place to start. Once the debtor is located, the attempt to collect kicks into high gear. Contacts and communications with other professionals enable the agency to have locals approach the debtor rather than somebody else travelling around the world. Should it become necessary to take the debtor to court, the network of debt recovery professionals includes lawyers who understand the nuances of local and international debt collection laws.
If you know from the beginning that the debtor you seek is in another country, it would be advisable to bring in professionals earlier than you would otherwise. Doing so offers you the following advantages:
· The cost of hiring a debt recovery company is less expensive than sending an employee trekking across the globe.
· Your accounts receivable department is likely ill equipped to negotiate international law.
· The tools and connections available to a debt recovery company save both time and expense.
· Your employees can spend their time on quality customer service rather than learning how to become private investigators or international lawyers.
Tiffany Marshall is a freelance writer who just so happens to have a banker for a brother. She writes on behalf of directrecovery.com, experienced international debt recovery professionals.