1. Anticipate
When the Edebex algorithm calculates the price for an invoice, it takes into account that it has not yet been paid. As your return depends on the difference between the purchase price of the invoice and the amount financed, we try to anticipate the payment behaviour of the debtor as good as possible. There are 3 scenarios:
- Unknown debtor: we increase the financing period by the average number of overdue days for payment of an invoice which is 20 days.
- Known debtor but unknown seller-debtor relationship: we increase the financing period by the average amount of overdue days according to the payment history of the debtor.
- Known seller-debtor relationship: we increase the financing period by the average amount of overdue days according to the payment history of this specific seller-debtor combination.
It is normal that the actual payment behaviour of a debtor can deviate from our predictions. Sometimes, the debtor might pay the amount before the anticipated due date of the invoice (which results in a higher return than calculated), while in other cases the payment might be received later (which then results in a smaller return).
2. Follow-up
The service offered by Edebex includes, among others, the follow-up on the payment by a debtor. We proceed according to the following model:
- Due date -7 days: calling the debtor (for every new seller-debtor combination)
- Due date +5 days: first reminder by mail
- Due date +8 days: calling the debtor
- Due date +15 days: second reminder by mail
- Due date +25 days: third reminder under threat of interest for late payment
- Due date +27 days: last attempt to call the debtor
- Due date +30 – 40 days: intervention of the credit insurer who takes over the case if the debtor is not willing to cooperate. If an amicable settlement is still possible, Edebex will continue its “soft collection”.
- Due date +100 days: ultimate deadline to open a claim with the credit insurer. Euler Hermes will try to obtain a payment during the prelegal phase. If no positive outcome, the case is transferred to the lawyer appointed by EH who will start the legal phase.
