Have you received an invoice from a contractor, but can’t pay it? See what steps the issuer of the invoice can then take and what they can result in!
Non-payment of an invoice – what can the issuer do?
If a contractor does not pay for an invoice received, then its issuer can take a number of steps to recover the money owed:
Contact the counterparty
Usually when there is a non-payment of an invoice, the first step is to communicate this information to the counterparty. It then serves as a reminder of the payment deadline.
Call for payment
If communication with the counterparty does not solve the problem, the invoice issuer can send the counterparty a letter of demand for payment. The letter states the amount of the debt, its source, the due date and the due date.
Debt collection
Many companies use debt collectors to recover debts. Such services are offered by debt collection companies, law firms, as well as conducted by selected factoring companies. How does factoring work in this case? It allows the counterparty to insure the receivables, so in the event of non-payment, the factoring company is responsible for recovering the debt.
The court case
The answer to the question of what to do when a counterparty does not pay an invoice is also to take the matter to court. Thus, in the absence of a response to the measures taken so far, the invoice issuer can use the court path. After winning, he can go to a bailiff to recover the debt with his help.
Entering on the list of debtors
The invoice issuer can also enter the debtor’s data on a list of debtors, such as BIG InfoMonitor or KRD – the National Debt Register. As a result, he may have a problem with entering into new contracts.
What can be the consequences of non-payment of an invoice?
If a counterparty does not pay an invoice, this can have several consequences, including:
Financial losses
The obvious consequence of a contractor’s failure to pay is financial losses for the entity that is due payment. On the other hand, losses may also affect the non-paying contractor – the contractor may charge penalties, and a bailiff may collect the amount due from his account or seize his property.
Legal consequences
If it turns out that a counterparty has failed to pay, it may face legal consequences. These may include provisions in the contract, but also consequences in the form of bailiff seizure of his property.
Bad reputation
Failure to pay what is owed can damage a contractor’s reputation and hinder his business, or even lead to bankruptcy.
Difficulties in contracting
Non-payment of an invoice can also cause problems in entering into new contracts with contractors and other entities due to records placed in debtor databases and a bad reputation.
