External Debt Collection

External Debt Collection

Debt Recovery Through External Providers

Customers with poor payment behavior, and cases where collecting outstanding receivables proves particularly difficult, can cost incalculable amounts of both time and money. At times, the burdens they place on a company’s receivables accounting become completely disproportionate to the debts in question. In such situations, it is advisable to outsource debt recovery to external service providers, who handle these specialized commercial and legal tasks in their function as governmentally regulated legal-services professionals.  


In particularly difficult cases, collection services providers enforce claims by exerting the necessary pressure. As experts in collecting third-party claims in a businesslike manner, these companies have access to the instruments necessary for successful debt recovery. The debt collection process usually begins with written reminders calling upon the debtor to pay the outstanding claim. If these reminders are unsuccessful, the collection services provider contacts the debtor—either in person or over the telephone—to discuss a solution. At customers’ request, collection agencies can also initiate legal proceedings. As per the Code of Civil Procedure, registered collection agencies are vested with the necessary power of representation to do this. Should the judicial dunning procedure result in an enforcement order, the collection agency can implement this enforcement.  


If the debtor’s credit assessment is positive, the collection services provider will either task a judicial officer with foreclosing on the debtor’s movable assets, or will enforce the debt by requesting an order of attachment and transfer of garnished claim. If the credit assessment is negative, the collection agency will commence long-term monitoring of the claim. Enforceable claims only expire after 30 years, so the agency pursues the customer’s legal claim by tracking debtors’ address data and asset situations, finding postal addresses, and monitoring and managing debtor accounts.

Organizing Debt Collection Outsourcing with SAP

Even when the actual process of debt recovery has been outsourced to an external provider, the company outsourcing its debt claims still has a number of organizational processes to handle. These include, among others, compiling the cases to be outsourced, maintaining ongoing communication with the collection agency (follow-up questions, status tracking, etc.), and posting successfully collected payments to its accounts. Keeping track of the entire procedure, knowing individual items’ status in SAP at all times, and initiating subsequent processes through the system are only possible if all affected processes are integrated comprehensively into SAP. 

 

Discover SOPLEX CL (Collector Link), our receivables management solution for optimizing cooperation with external debt collection services providers.