Essential Collections Strategies for Businesses
Collections safeguard your company’s cash flow and help maintain financial stability. How should you manage collections?
Collections are an essential part of business operations, ensuring cash flow and financial balance. In Finland, collections and payment reminders are governed by the Consumer Protection Act and the Debt Collection Act, making it important for all businesses to be familiar with these regulations. In this article, we’ll cover the key steps of the collections process and best practices.
Payment Reminder – The First Step Towards Resolution
Sending a payment reminder is not legally required, but it is a well-established practice that gives the debtor an opportunity to address their situation before collection actions begin. A good payment reminder should include:
- Invoice details and the overdue payment amount
- Due date
- Possible consequences of non-payment
It's important to note that the content and practices for payment reminders may vary depending on the company and the specific situation.
Collection Actions – When and How to Proceed?
If a payment reminder does not yield the desired outcome, it’s time to move forward with collection actions. The Debt Collection Act defines collection measures and their limitations. A collection agency must act in accordance with good collection practices, and collection fees must be reasonable and lawful.
The collection process typically progresses as follows:
- Invoice becomes overdue
- Payment reminder
- Payment demand
- Tratta (a public payment notice for businesses)
- Legal collection
- Enforcement (execution)
Laws and Regulations Govern Collection Processes
The Debt Collection Act and other laws, along with guidelines from authorities, form the foundation of collection activities. These regulations ensure that the collection process is both legal and ethical.
For entrepreneurs or business decision-makers, understanding the laws and regulations governing collections is particularly important, as proper collection practices can directly impact a company’s cash flow, reputation, and customer relationships.
What is Gallant’s Collection Service?
Gallant’s collection service is designed to simplify your company’s operations with comprehensive accounts receivable management. When your business needs an efficient yet customer-focused collection solution, we offer a clear and hassle-free service model that combines accounting tasks with collection services.
How Does This Benefit Your Business?
Everything You Need Under One Roof
Our dedicated experts handle payment reminders, interest invoices, and collection services without the need to outsource the process elsewhere. This saves time and improves transparency.
Tailored Solutions
The service package is customized to meet your company’s specific needs, whether it’s for a few individual invoices or a broader collection process.
Professional and Considerate Collections
We ensure that collections are handled professionally and in accordance with good collection practices – without jeopardizing your customer relationships.
How Does the Service Start?
Assessment and Agreement: Together, we define the framework of the collection service process, including schedules and reminder procedures.
Easy Onboarding: Gallant’s experts ensure a smooth transition during the agreement phase.
Launch: Once the service is up and running, you can trust that your receivables are managed and your cash flow is secured.
A Flexible Collection Service at Your Side
With us, collections are never impersonal or cold: we ensure your customers feel acknowledged, allowing the customer relationship to continue even in collection situations.
Whether you need assistance with sending payment reminders, initiating collection actions, or outsourcing the entire process, we are here to help. Contact us, and together we’ll create an effective and flexible collection solution for your business. Together, we can ensure your company’s financial stability and continuity.
