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Version: 8.0

Debt recovery

Introduction​

Debt recovery is a process whereby a company takes steps to recover funds owed by debtors who are in arrears. The basic principles of debt recovery include clear and respectful communication with the debtor, regular monitoring of late payments, the use of reminders and warnings, the establishment of flexible payment arrangements where necessary, and, as a last resort, the use of debt recovery agencies or legal action.

The aim is to maximise debt recovery while maintaining a positive relationship with the customer.

Debt recovery configurations​

It is essential to configure debt recoveries so that you can then launch a batch that will help you to follow up customers on unpaid invoices.

To configure debt recoveries, several points are important:

  • Define debt recovery methods.

  • Define a number of days before debt recovery.

  • Configure Email / traditional mail.

  • Define minimum amount for debt recovery, etc.

  • Define customer categories with their respective debt recovery methods.

  • Other (define timeframe before sending an email / mail, configure customer block, etc.).

Debt recovery methods​

Access : Accounting → Debt recovery → Configuration → Debt recovery methods

Debt recovery methods can be found in the debt recovery methods menu. If required, you can create several debt recovery methods.

note

You can differentiate debt recovery methods by customer category.

When you create a debt recovery method, you will enter :

  1. A name.

  2. A code.

  3. Add lines to the “Recovery method lines” table.

When you add a line, you will have to configure it. There are 7 configurations for setting up the overlay lines:

  1. Label: define the name of the debt recovery method line. For example, “Email”.

  2. Standard trigger delay: when the invoice due date is not respected, and the invoice is still unpaid, this delay will trigger the debt recovery. Note, if a line is set to 7 days, debt recovery is only triggered 7 days after the first alert of an unpaid invoice.

  3. Minimum amount: minimum debit balance that will trigger debt recovery (this does not refer to invoices, but to the customer balance). If the minimum amount is not reached, debt recovery will not be triggered.

  4. Manual validation: if this box is ticked, manual validation of the reminder step is required first. You can always add an email template.

  5. Message template: add a mail template here. Note that you can attach a BIRT template to your message template.

  6. Print Message: enter the message that will appear on the Mail.

  7. Specific message: enter a specific message for Mail.

  8. To apply a debt recovery, use a batch (Application config).

tip

Lines are sorted by sequence.

info

Here is an example of a debt recovery operation with the “Manual validation” option enabled.

  1. Manual validation: if this box is ticked, manual validation of the reminder step will be required first. You can always add an email template.

  2. Then, launch a debt recovery batch. Access: Application config → Batches → Accounting batch → on the file, select “Debt recovery” as the action → Type of debt recovery batch (Configuration tab) select “Classic debt recovery” → click on the “Debt recovery batch” button.

  3. Next, open a debt recovery sheet in order to validate it. Access: Accounting → Debt recovery → Debt recovery → you will see the “Customer reminder” list (orange colour) waiting to be validated. Click on a line to open it.

  4. Validate the debt recovery: click on the “Validate the debt recovery” button to validate it.

  5. Paperclip icon: click on the paperclip icon at the top. Here you will find the PDF with the email that was generated.

  6. If you go back to the debt recovery list, you will notice that the validated lines have changed its colour to green.

App Settings​

Access : Application config → Apps management → Accounting, configure → click on the company file → open the Debt recovery tab.

Configure the debt recovery methods, in the Accounting App by Company, “Receivables recovery” tab.

Here you will be able to define:

  • Late payment account blocking: block customers by batch after a certain delay of invoice payment. When this box is ticked, it will make appear another field, “Number of days before account blocking”.

  • Number of days before account blocking: enter the number of days before the account is blocked.

caution

Checking this box does not result in automatic blocking: you must first go through batch processing.

In addition, you can block the customer from the debt recovery file.

  • Factor: find the company's factor here.

  • Mail transit time: the delay before sending a mail by post is used to define the number of days before the customer will initially receive the invoice (for example: it takes two days for the invoice to reach the customer by post; if the customer is in direct payment, it is inconceivable to send a reminder before receiving the document).

  • Debt recovery configuration table: in the configuration table, you can define the customer category associated with the reminder method.

info

Important: the advantage of defining a reminder method by customer category is that you can define different methods depending on the type of customer (small business, an autopreneur etc)...

You can have a more aggressive debt recovery method for an individual and a more flexible one for a company, for example.

Management of debt recovery batches​

Access : Application config → Batches → Accounting batches

In order to automate the debt recovery process, it is possible to go through a mass processing (i.e. batch) associated with a scheduler (for example, in order to be able to launch it at night).

tip

Remember to configure a default email account, as this is essential for the debt recovery process to work properly.

Access Application config → Message → Email accounts

  1. Open the “Accounting batch” menu and then open an accounting batch file.

  2. Debt recovery configuration: click on this tab. In the “Debt recovery batch type” field, enter “Classic debt recovery”.

  3. Debt Recovery Batch: you can then launch the batch by clicking on the “Debt Recovery Batch” button.

  4. Information: in the Information tab, in the “Batches” table, you will see the debt recovery lines that have been processed.

tip

Block customers with late payments: you can also block customers with overdue payments by batch by selecting this option as an action on the debt recovery sheet.

  1. Once the batch has been launched, you will find the list of debt recoveries in the debt recoveries menu.

Access : Accounting → Debt recovery → Debt recovery

In this list, a colour code is applied according to the status of the recovery:

  • Orange: pending validation.

  • Green: recovery validated and email sent.

This list contains a number of essential elements, such as the name of the customer, the reference date (the oldest due date of the invoices in the debt recovery), the dunning method, the current level of dunning and the total balance of the customer concerned.

tip

Access : Accounting → Debt recovery → Debt recovery

In the Debt recovery menu, you can also block customers with late payments by clicking on the “Block customers with late payments” button at the top of the page.

Information on the debt recovery sheet​

There is a range of information that can be found on the debt recovery sheet:

  1. The debt recovery sequence.

  2. The customer's balance due.

  3. The recoverable balance due (this is only the sum of unpaid invoices with a due date less than today's date).

  4. Reference date: here the system retrieves the oldest due date of invoices in the overdue invoices.

  5. Last debt recovery date: if applicable, the system also indicates the date of the last debt recovery in order to have a history.

  6. Shift to irrecoverable: if the recovery is changed to irrecoverable, the invoices in the recovery will be identified as irrecoverable. This is for information purposes only.

  7. Owner deceased: activate this option in order to indicate here if the owner is deceased and will therefore not be able to pay his invoices.

  8. Address unknown: indicate here if the holder's address is unknown.

  9. Respite date before account blocking: if payment blocking is activated, the “Respite date before account blocking” will appear.

  10. In the characteristics, you will find :

  • The customer's debt recovery method.

  • The active level (for example, an email).

  • The level to apply/awaiting: you can change the level manually.

  • Debt recovery validation: this button allows you to validate the recovery manually.

The last two items will only appear if the debt recovery method line is notified as “Manual validation”.

On the debt recovery file, you will also find 5 tabs:

  • Debt recovery history : find debt recovery lines in the table “Debt recovery history”.

  • Invoice concerned by the debt recovery: this is where you will find the invoices with their due dates / payment / reason for delay etc.

  • Invoice term concerned by the debt recovery: useful when there are multiple due dates (for example, an invoice that has three due dates and only one or two of the due dates are concerned by debt recovery).

  • Blocked invoices: find the list of invoices that are blocked.

  • Contact: find the contact associated with the debt recovery (useful when sending an e-mail). The contact may contain the address, telephone number and website.

Management of irrecoverable invoices​

Debt recovery history​

Access : Accounting → Debt recovery → Debt recovery history

Once a debt recovery has been validated (manually or automatically), the system will generate a debt recovery history. The advantage of the debt recovery history is that it provides a traceable history of the debt recoveries that have been made. The debt recovery parameters are integrated into the history.

  1. Debt recovery settings: this is where you will find all the information relating to debt recoveries.

  2. Partner information : find detailed information on the customer and the balance, and their debt recovery level at this moment.

  3. Debt recovery content - Mail: here you will find the list of any mail that has been sent. This table contains details of mails that have been sent.

  4. Paperclip icon: find a pdf document by clicking on the paperclip icon.

  5. Report: here you can edit a Payment Reminder document.

caution

Important: what you need to understand is that a “Debt recovery history” is static, unlike debt recovery, which can change with each batch application. The concept is to have a clear and detailed debt recovery history.

Irrecoverable invoices management​

Access: Accounting → Debt recovery → Debt recovery

If the customer is in liquidation, and you wish to write him off as irrecoverable, open the debt recovery file. In the file, click on the “Invoice to be recovered” tab.

  1. Click on a line that can be found in the “Invoice concerned by the debt recovery” tab. A new window with the invoice will open.

  2. On the invoice, click on the Accounting tab.

  3. Transferred to usher : here you can indicate whether the invoice has been transferred to usher.

  4. Payment delay reason: the reason for late payment allows you to indicate the reasons why payments are late.

  5. Next action date: you can set a next action date for implementing measures.

  6. Payment delay reason comments: leave a comment in order to give more details about the reason for non-payment.

  7. Irrecoverable shifting reason: the reason will be set by default. For example, “Manual write-off”.

  8. Shift to irrecoverable: here you can manually write off an invoice by clicking on the “Shift to irrecoverable” button.

  9. Irrecoverable status: once you have written off an invoice, the irrecoverable status will indicate that the invoice has been written off.

tip

Note: once the invoice has been written off, the entry line 411 will also be written off. You can also manually write off an entry line as irrecoverable.

When an invoice becomes “Irrecoverable”, a process is set in motion.

Axelor has accounting irrecoverable management, but to do this you need to make some initial settings in the Accounting app (access: Application config → Apps management → Accounting, configure → click on the Company file → open the Accounting tab).

In the Accounting tab:

  1. Irrecoverable account: specify the uncollectible account that will be used to generate an entry for a loss of receivables on an account (for example 654).

  2. Irrecoverable shifting reason: further down in the Accounting tab (“Shift to irrecoverable” section), you will find the default reason for writing off a receivable.

  3. Tax standard rate for irrecoverables: find here the standard VAT for irrecoverable invoices.

  • It is then possible to process irrecoverable invoices in batch in order to post the entries as a loss, via the menu Accounting → Periodical processing → Shift to irrecoverable.

  1. Get invoices and schedule lines to set as irrecoverable: click on this button to add the invoices as “irrecoverable” and then validate them.

  2. Shift to irrecoverable: this generates an entry in the “Irrecoverable” journal.

  3. Irrecoverable: if you open an invoice that has been written off, you will notice that it’s marked as “Irrecoverable” (this appears in the panel on the right, next to the total amount).

  4. Invoices & Rejects: in this tab, an entry will be generated (Irrecoverable journal) and it will appear in the Invoices & Rejects tab (on the invoice file).