Here are the most frequently asked questions. But we can answer a lot more if you like. Just get in touch.
Handing over receivables management to us lets you concentrate on your core business. You will be safe in the knowledge that experts are taking care of your receivables.
Because we’ve done this thousands and thousands of times before, our expertise, experience and systems are refined to get more debts paid and faster – so you can benefit from more liquidity. For investments that grow your business, or even protect you from insolvency.
Don’t forget: we monitor debtors who are insolvent now but may not be in the future. So as soon as they are able to pay you can receive money you had already given up hope on.
Litigation is expensive and you can be waiting a long time for a court ruling. We always try to settle the issue out of court first, and only consider court proceedings if that fails. Not only does this save money, but you usually get paid faster and can retain good relations with customers.
Debt collection agencies are usually more successful because collection is their core activity. We have specialised know-how, human resources and technology.
In contrast, most small and medium-sized enterprises put accountants or sales agents in charge of debt collection. This extra task adds to the employee’s workload and is low down on their list of priorities. The results can be a low level of collection, or even an increasing amount of bad debt. We therefore strongly recommend using a dedicated collection agency. Let your employees concentrate on your core business. And what’s more: you’ll unlock more liquidity by minimising non-payment.
That depends on your wishes and needs. Our professionally-designed processes ensure we work hand in hand with the internal credit and collection department. Your departments can focus resources and energy on evaluation and selecting customers, and on the early stages of the collection process. We mainly concentrate on the later stages of the collection process, including both the pre-legal and legal steps, and helping you collect payments.
We periodically send you reports so you can check the status of your accounts. We can also send reports by email or by fax if required, so you can act quickly even if you outsource receivables management.
In many cases, using an external collection agency has a positive effect on your image. Investors, suppliers and customers will know you take collection seriously and that you use a professional partner to handle it.
Unfortunately, not all collection agencies possess the necessary resources and take the necessary steps to prevent harm to your company. At EOS, we work with focus and understanding, always seeking amicable solutions, and keeping in mind that the debtor is your customer. We know how valuable customer relationships are and do our best to protect them.
There is often uncertainty about the age limits that apply to young people engaging in certain activities (e.g. buying or ordering goods from mail order companies). According to the Austrian Parent-Child Relations Amendment Act (‘Kindschaftsrechts-Änderungsgesetz’), effective from 1 July 2001, the following age limits apply:
First of all, distinctions should be made between the capacity to act, responsibility for civil wrongs and the capacity to enter into legal transactions.
To simplify the issue somewhat, capacity to act begins at birth – this means that an infant is capable of upholding rights and responsibilities.
Under criminal law, responsibility for civil wrongs means that the child is responsible for his or her conduct as of the completion of his or her 14th year (criminal law relating to young offenders applies until completion of the 19th year). In respect of the capacity to enter into legal transactions, rights and duties are constituted by one’s own actions or conduct. In this case the following age categories apply:
From their birth to the end of their 7th year, children are deemed incapable of entering into legal transactions (with the exception of transactions typical of this age group such as buying a hot dog, sweets…).
Anyone who resides in a house or flat for longer than three days, or moves, must notify the registration office accordingly.
The costs are regulated in ordinance no. 141 of the Federal Ministry of Economic Affairs of 27 March 1996. Each service we offer is tailored to the client, so we cannot provide a general list of prices. In general, the cost of the services is based on a percentage of the amount actually collected. The level of commission depends on the size of the debt assigned and on the age of the remaining arrears. The older your debt, for example, the higher the commission (experience has shown that it is more difficult to collect older debts). It is important to stress that our fee is charged only on receipt of successfully recovered invoices.
You must inform your business partners of the general terms and conditions (T&Cs) and/or make them available at the time when the transaction is concluded (as a rule when the merchandise or service is ordered). Otherwise the T&Cs will not be a suitable instrument for enforcing your claim.
In the T&Cs you should state in detail how and on what terms you execute your service provision/delivery of goods and stipulate the terms of payment and the consequences of default (rate of default interest, dunning expenses, debt collection costs…). Do not be afraid to refer clearly to these seemingly unpleasant topics – even if your sales department regards them as unnecessary. Unusual provisions with adverse consequences for the contractual partner only become valid in the T&Cs when particular reference is made to them. It is therefore advisable to visually highlight the relevant parts of the text.
Terms and conditions that are only printed on the back of an invoice are merely informative in nature. After all, they were not known to the customer when the transaction was concluded. They cannot be used to help assert claims in court.
Examine the creditworthiness of new customers or demand full or partial advance payment for larger first-time transactions. Reputable customers will usually have no objections. If the customer is unappreciative or refuses to comply, this could be a bad sign. Talk to other suppliers about their experiences with your new customer.
Monitor your customers’ payment behaviour on an ongoing basis and react to any deterioration by taking greater care. Always inquire after the reasons.
There are several possible signs that a customer’s creditworthiness has deteriorated or might do so in the future:
Ensure that your bills are clear and accurate. This will reduce customers’ scope for objection and delays in payment.
Make sure that the invoice recipient’s name and address are correct and complete. Incorrect details can delay payments and even constitute subsequent grounds for lost court cases. Not least because of that, your customer files should always be up-to-date. Keeping your accounts up-to-date (at least once or twice a year) ensures that your customer data is always as accurate as possible.
The minimum requirements for invoices (and of course credit notes) as regards VAT law are generally as follows (please ask your tax consultant about exceptions):
Please note that since 1 January 2004 it has been mandatory to issue an invoice if the delivery or service is rendered for an enterprise or legal entity, or for clubs, societies or local authorities. Since 1 January 2006, an electronic signature has been mandatory on all invoices sent electronically.
Clear and unambiguous information about when the invoice amount has to be paid should be an important element of your invoice sheet (‘due date clause’).
Define the payment term for your customers as precisely as possible in your T&Cs and also on your invoice. The end of the payment term should always be the day by which the money is credited to your account.
Reduce the various discount and payment periods for your customers to a maximum of two variants. Unclear parameters are often interpreted generously – to your disadvantage.
Offer a fair discount arrangement. This will ensure that many customers pay their bills quickly, thereby minimizing their default risk.
If you grant a discount, define the discount periods precisely and on no account grant any leeway. Over time, unjustified discount deductions add up to considerable losses.
If you do not grant a discount, make clear and unambiguous reference to this on your invoice.
There is generally no legal obligation to send reminders as a follow-up to properly-issued invoices. Payment reminders, payment demands and the like are usual but not mandatory.
In principle, reminders should be sent to all customers when required. If you are concerned that some individual customers might react negatively to your written reminders, perhaps you are too heavily dependent on these customers.
Reminders sent by registered post involve high costs. Sending them by normal post is quite sufficient. Call your debtors as well and ask why they are not fulfilling their obligations. Make a record of the call; it might be helpful in subsequent disputes. Send your reminders rigorously, regularly and, most importantly, promptly after the expired payment term. One reminder per unpaid invoice should be enough. Let EOS ÖID deal with any further reminders that may be necessary.
If you want to send more than one written reminder per invoice, on no account should you provide any indication in the reminders themselves of whether more are scheduled (e.g. first reminder stage, second reminder stage…). Debtors adapt to this systematic approach and then often wait until the last possible deadline.
Prepare yourself for your accounts department being inundated with phone calls in the early stages after a new, tightened reminder system has been introduced. Your sales department, too, will side with the customers and doubt the necessity of the new, stricter reminder scheme. But you’ve got to see it through!
After a few months it will become clear that payment practice is far better than before with hardly any reduction in sales.
Give your sales force and/or sales department the opportunity to talk to the customers about their unpaid bills (information comes with a copy of the first reminder) but allow only a short period for this intervention. It is very often the case that field staff drag their feet in handling complaints out of false loyalty to customers. Inform the sales department about new developments in the billing and dunning process. Only then can you expect help and support from your employees.
Do your sales staff receive commissions for completed (and paid) sales?
Frequent unjustified complaints by a customer can often indicate that he or she is looking for an excuse to delay payment. The handling of complaints should therefore be speedy and carried out by competent employees in your company. Very often, partial or incomplete payments lead to unclear account situations that delay payments further and may even lead to confusion in your accounting department.
Make sure that the local contacts for complaints in your organization (e.g. branch manager, salesperson, workshop manager, field staff…) quickly examine and clear up the complaints received. These units very often have ‘complaints folders’ that are processed sluggishly. Deadlines for action should be set and backlog records made once a week.
Debt collection requires specialists. Talk to your employees. Internal resistance to the outsourcing of dunning activities, fear of job losses and of losing in-house competence are not to be underestimated. Only cooperation in a spirit of trust between your employees and the debt collection institution can lead to success. Take a close personal look at the debt collection company with which you want to entrust your accounts receivable, preferably at its own premises. If you do not find the company convincing from a visual point of view, its services in the debt collection segment will not fully satisfy you either. Look for a partner that seems to suit you.
Here are some tips in this area: