Payment schedule: how to optimise your recovery?

When facing a customer with payment difficulties, the payment schedule represents an amicable solution to recover your debts without compromising your commercial relationships. As an alternative to often lengthy and costly contentious procedures, discover how to implement an effective payment schedule, from the preliminary analysis of your debtor to the automation of collections via SEPA direct debit.

The causes of late payments can be multiple: temporary cash flow difficulties, discrepancies between receipts and disbursements, or exceptional situations affecting the company’s activity.

A payment schedule provides an appropriate response to each of these situations by offering the possibility to spread the settlement of a debt over a defined period. This amicable agreement allows the debtor to repay their debt in several regular instalments, adapted to their financial capacity. It is concretely reflected in a simple payment calendar, but it is above all a negotiation tool that allows reconciling the interests of both parties.

Good to know: The payment schedule has the value of acknowledging debt. In case of complications and recourse to legal proceedings against your debtor, you can use it as proof.

For the creditor, the schedule presents several major benefits:

• Avoid costly and time-consuming legal procedures for the company.
• Preserve the commercial relationship with the customer, a valuable asset, especially in a competitive economic environment.
• Accelerate receipts by avoiding the additional delay of contentious proceedings, often long and detrimental to cash flow.
• Obtain an acknowledging debt in case of a negotiation failure, strengthening the creditor’s legal position.
• Reduce recovery costs related to traditional judicial procedures.

For the debtor, these are also advantages:

• Overcome temporary cash flow difficulties without compromising the sustainability of their activity.
• Avoid aggravating the situation with legal proceedings and their consequences on the company’s reputation.
• Maintain commercial credibility with partners.
• Adapt repayments according to their actual financial capacity and a sustainable timeframe.
• Continue to benefit from good commercial relations with their supplier.

While payment scheduling avoids many legal and administrative complications by proceeding with amicable recovery without the intervention of a third party, it requires just as much vigilance before its implementation and throughout the staggered payments.

Before setting up a schedule, it is crucial to assess:

• The good faith of the debtor client, particularly through their payment history.
• Their actual financial situation, by ordering commercial information (solvency research, payment capacity assessment, etc.) or using financial databases.
• The causes of payment difficulties and whether they are temporary or structural.
• Ongoing contracts and upcoming invoice receipts.
• The sustainability of the commercial relationship and its strategic importance.

This analysis phase helps determine if the schedule is the most appropriate solution and what terms to propose. In practical terms, if doubt remains on any of these points, implementing a payment schedule will only generate additional difficulties and worsen the situation.

To maximise the chances of success of the schedule:

• Require an immediate first payment as proof of good faith. The amount must be significant but also tenable by your debtor.
• Define a realistic but shortest possible repayment period, generally between 3 and 12 months.
• Establish regular payment dates adapted to your debtor’s capacity and their collection cycle.
• Formalise the agreement in a document signed by both parties, detailing all practical modalities.
• Include an acceleration clause in case of non-compliance with the payment dates, thus protecting your interests as a creditor.

A payment schedule is simply reflected in a table that allows monitoring the staggering and compliance with the payment of the customer invoice, from its initial amount to the total repayment of the debt. It consists of as many rows as there are instalments and at least four columns:

• Column A: Number / Reference of instalment
• Column B: Due date
• Column C: Amount to pay for the instalment
• Column D: Amount remaining to pay to settle the invoice

This table is integrated into the document signed by both parties, the creditor and the debtor.

Once the schedule is in place, rigorous monitoring remains essential:

• Systematic verification of compliance with due dates.
• Monitoring of possible direct debit rejections.
• Proactive communication in case of payment incidents.
• Immediate follow-up in case of delay on a due date.

In case of failure of the schedule despite these precautions, the creditor retains the possibility of resorting to contentious proceedings, with the signed agreement then serving as an acknowledgement of debt.

To make the management of payment schedules more reliable, SEPA direct debit, Core or B2B, constitutes a particularly suitable solution. This payment method allows planning and automating the collection of instalments and their accounting reconciliation, considerably reducing the administrative burden associated with monitoring schedules.

SEPA direct debit offers several specific advantages in the context of a schedule:

• Automation of collections on agreed dates, eliminating manual reminders.
• Reduction of risks of forgetting or delay thanks to the programming of direct debits.
• Simplification of accounting monitoring thanks to the traceability of direct debits via the UMR (Unique Mandate Reference).
• Reduction of administrative management costs and time spent on reminders.
• Securing the process thanks to the SEPA mandate signed by the debtor.
• Compliance with European banking standards facilitating international transactions in the 36 countries of the SEPA zone.

To set up an automated payment schedule via a SEPA direct debit solution integrated into your management tools and processes, it will be necessary to:

1. Have the debtor sign a SEPA direct debit mandate, formalising their authorisation for direct debit. Make sure you have your 13-character Creditor Identifier (CI).
2. Schedule the dates and amounts of direct debits in your management software, according to the payment schedule you have established with your debtor client.
3. Automate bank reconciliation thanks to unique transaction references.

The payment schedule, especially when coupled with solutions like SEPA direct debit, represents a pragmatic and effective approach to debt recovery. This solution allows reconciling the cash flow imperatives of the creditor with the temporary difficulties of the debtor while preserving the commercial relationship. The key to success lies in a rigorous evaluation upstream and careful monitoring of compliance with due dates.

To help you with this task, integrating a SEPA direct debit solution allows you to optimise the management of your payment schedules.