The statistics are implacable. Year after year, it is confirmed that 25% of business failures recorded each year in France are attributable to defaults but also to late payments. Hence the importance of protecting oneself against this, particularly in the most fragile companies in terms of cash flow (young companies, very small businesses). To do this, two steps are essential and, if possible, should be taken before the incidents occur.

First step, awareness of customer risk

The first is to raise awareness. For this purpose, there is no lack of quantitative studies and FIGEC offers, for example, an infographic on its website that presents the main indicators in a synthetic and very educational way.

We will remember this often ignored fact: 80% of the individuals who do not pay their bills are perfectly solvent. It is therefore a question of ill will that must be borne in mind when creating an activity aimed at the general public. But companies are not left out and, even if a part of the late payments is due to real cash flow difficulties on the part of the debtor, in 9 cases out of 10, the problem is elsewhere. It is either due to poor internal organization of the invoice payment circuit, which can be caused by the absence of purchase orders, the lack of dematerialization of the circuits or a poor distribution of responsibilities (signature circuit, etc). Or it may be due to a proven unwillingness - my supplier can wait! - which is based on old reflexes.

The good news is that new regulations - the Macron Law, the Sapin 2 Law and now the PACTE Law - provide a better and better framework for these abuses and provide for administrative and financial sanctions that should make these behaviors change. This should not prevent the company from organizing itself in the face of customer risk.

Second step, organize yourself according to priorities and means

The second step is therefore to structure the response to this risk. While waiting for behaviors to change, many measures are necessary and possible. Without the need for the company, especially a small one, to hire a debt collection or customer risk specialist (see our article "Managing customer risk, everyone in the company is concerned"). Four measures in particular are easy to take.

1/ To comply with the law for the drafting of contracts and the edition of invoices

Bad payers take advantage of their creditors' possible weaknesses on this point to delay their payments or even contest the validity of the invoices. Worse, in case of litigation, these formal flaws may lead the court to find against the creditor or, at least, to ask him to reissue his invoices or the contract. This causes, at the very least, a loss of time before being able to demand payment again.

> Our advice: have your standard contracts and invoices validated by a consultant. A chartered accountant can be of great help in most cases. If the contracts and the services provided are of a complex nature, the use of a specialized lawyer may be useful.

2/ Understand the client's internal procedures (BtoB) and comply with them

It is perfectly legitimate, in BtoB, to ask your customer how his order and payment circuit works. The objective is then to understand if there are purchase orders to be validated, if the circuit is partly dematerialized and in which form, including technical, the invoice will have to be issued to be perfectly treated by the internal process of the customer.

> Our advice: take advantage of the moment when the customer needs you, when placing an order, to gather this information in a positive atmosphere. At the same time, agree on the payment deadlines and on the optimal dates for the receipt of the invoice by his accounts payable department for a quick payment. This information, formally validated by the customer through an exchange of e-mails, can be integrated into your customer accounting and allow you to create the appropriate alarms in case of delay.

3/ Organize a watch on events concerning your customers and prospects

A lot of legal and commercial information is available, in a perfectly legal way, to allow you to better understand the profile of your business customers and the significant events concerning them. To have access to this information, you can ask your accountant for a monitoring of these customers - legal announcements for example - but it will not be complete. It is by turning to companies in the business information sector, represented by the FIGEC, that you will be able to access an exhaustive vision of the situation. Better still, you will be able, as you develop and according to the typical profiles of your clients, to access benchmarks and scorings that are increasingly elaborate and personalized.

> Our advice: develop your use of these surveillance tools, which are similar to radars, gradually but without delay. From the very first steps of your use, you will acquire a serenity born from the fact that no important information, among those you have defined, can escape you anymore.

4/ When faced with late payments, rely on collection experts

Despite all your precautions, it is unfortunately statistically inevitable that you will have to deal with late payments. In this case, and once the usual reminders have been exhausted, you should not hesitate to call on debt collection professionals (whose activity in France is represented by the FIGEC). They will be able to put at your service a know-how - reminders, pre-litigation management, litigation management, financial mediation, etc. - which allows them to claim today a success rate of 90% in debt collection. And in the case of private clients, civil investigation professionals are just as effective in finding debtors.

> Our advice: Launching a collection procedure takes time, mobilizes your teams and is not your job. Focus on developing your business and entrust this delicate aspect of customer relations to professionals. Not only will you obtain better results, but the intervention of a third party, with a mastered know-how, will allow you to maintain a professional customer relationship and to protect your future activity with the customer as much as possible.