One of many challenges and considerations when trading overseas is how to deal with a customer who won’t pay. Recovering money you’re owed from a client based in the UK brings its own challenges, although move this into an international context and you have further obstacles to overcome. However, international debt collection need not be a barrier to securing payment, or indeed, doing business overseas.
Here are some key considerations when pursuing international debts:
Payment terms vary
Standard payment terms differ from country to country and so it is important that you do your research to familiarise yourself, and your business, with the payment terms of countries in which you operate.
More importantly, you need to ensure that your terms and conditions clearly state your expectations where payment is concerned; allow you to charge late payment interest; and that the contract is governed by UK law.
Cultural approach to payment and debt
Similarly, different cultures take varying approaches to the payment of goods and services. For example, in the UK late payment is an on-going and increasingly problematic issue for many businesses, whereas other countries take a much more timely approach to paying their suppliers.
To mitigate the risk of late payment, or even non-payment, you should carry out credit checks on your clients before agreeing to extend credit to them.
Language barriers
Some businesses may worry that they would have little to no success in recovering money they’re owed because they cannot speak the local language. However, this is arguably one of the easiest obstacles to overcome. English is the international language and so it is unlikely that you’ll come across a customer, or a debt collector, that cannot speak English. In any event it is fairly easy to enlist the support of a third party translator to assist you.
Local law
Occasionally there are differing rules that prevent non-resident firms from collecting debt or issuing legal proceedings in foreign jurisdictions. As such, UK-based debt collection agents and debt recovery solicitors can only act on your behalf where the local law permits them to do so.
However, if you outsource your debt to J&P Credit Solutions this will no longer be a barrier to international debt recovery. We are part of the TCM Group, a global network of debt collection providers, and so we are able to instruct other agents in the network to act on our behalf.
Physical presence
Having a physical and authoritative presence in other countries would facilitate the collection of outstanding invoices as it would be easier to seek and encourage payment from customers. However, this could prove very expensive and the costs would likely outweigh the return on investment.
A solution to the problem is to outsource your debt collection requirements. J&P Credit Solutions is part of a global network that has a presence in more than 145 countries.
To find out how we can assist you with international debt recovery please contact Andrew Lloyd on 020 8290 7096 or email alloyd@judge-priestley.co.uk.