A default is the failure to pay a certain monetary value on the agreed settlement date.

The reasons that motivate non-payment by a person or company are very varied. They range from bankruptcies to personal situations.

The omission of payment only exists when a payment deadline has been previously established. Failure to pay can be punished by law. A common punishment received by people or companies that commit such an act is embargo.

See debt default

When companies make sales of services or products, they immediately issue an invoice or contracts by which the customer is committed to pay as stipulated in said invoice or contract.

The non-existence of a previous document detailing the payment date, the pending value and the client's signature, can prevent a legal claim for any non-payment. Therefore, the creation of a contract or an invoice at the time of closing a loan or sale of a product and / or service turns out to be essential.

Normal procedures for non-payment

Studies or analysis on defaults reveal that this situation has many effects on the normal development of companies. This leads companies to have to raise their financial costs, thus reducing revenues and profits. It also turns out that when these defaults have a high weight on the total accounts payable, they usually limit the growth of the company. At the same time, they generate tensions and frictions that are difficult to heal between the parties.

Faced with a situation of non-payment, it is advisable to follow some logical steps to proceed in the most appropriate way possible.

  1. First, you must proceed to contact the client in order to reconcile the total owed. If a payment has been made and this for some reason is not reflected, if the value of the subscription is not the same, etc.
  2. As a second step, given that there may be some confusion with the customer's payment deadline, it is convenient to send a reminder document to the customer. Showing you the amount owed and the date of payment.
  3. If from now on the client does not respond, as a third step, the client will be informed of the legal steps to follow to proceed with the collection of the debt.

In addition, the client can be informed of the interest that such debt will generate for each lapse of time, as well as the charge for legal expenses.

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