Credit and claims management In practice for cross-border transactions within the EU

A.Technical competences B. Workflow management C. Software requirements D. Day-to-day accounting E. New cost structure 5. Internal management – Effective payment Monitoring 2

A.Technical competences B. Workflow management C. Software requirements D. Day-to-day accounting E. New cost structure 5. Internal management – Effective payment Monitoring 3

A. Technical competences I. Language requirements Ideal if English is mastered in addition to one’s own national language. Recommended: easy and simple address + simple Internet website (entrepreneur’s national language + English). Advantageous: to be found quickly through usual search engines. II. Legal requirements – special attention to legal issues abroad: Payment deadlines and payment processing abroad are different than in their home country. Regulatory requirements of the respective EU Member State. Identification numbers required - VAT ID number, IBAN, BIC/SWIFT.

A.Technical competences B. Workflow management C. Software requirements D. Day-to-day accounting E. New cost structure 5. Internal management – Effective payment Monitoring 5

B. Workflow management I. Basic and essential tools of cash and credit management II. Customer database III. Electronic invoice management IV. Returns management V. Monitoring a special account for international payment VI. Standard forms VII. Items outstanding and reminder despatch 6

I. Basic and essential tools of cash and credit management There are some tools and reports that will help when monitoring payment Debtor record – specifying debtor and due amount Monthly collection index - % of successful collection Guide establishing debt collection practices - timeline 7 (Accounts receivable during certain period – received advances) x Nº days during the period Annual turnover

II. Customer database Inclusion in electronic file Customer’s full address dataset (delivery address/billing address) Customer’s bank details (IBAN, BIC/SWIFT); Contact numbers of the client (telephone, fax, address). New customer

III. Electronic invoice management A useful electronic invoice management should include: Customer name Invoice number/ Customer number/ Shipping number/Order number Invoice date Due date Payment amount Reminder date Payment date Recommendation: send together with goods!

IV. Returns management If invoice returned as undeliverable: contact client! Do not defer until invoice due payment date. V. Monitoring – special account for international payments If company sets up bank account for foreign payments: monitor incoming payments daily (using standard banking software) If an invoice is paid: enter payment date and amount into the electronic list. If amount paid differs from the invoiced amount, inform customer immediately! VI. Standard forms Use templates for target countries

VII. Items outstanding In case of lack of payment, it is crucial to know what the reason is behind the lack of payment in order to adopt the best strategy Lack of payment Oversight?Inability?Choice? The best way to know the scenario the company is facing is to chase overdue invoices immediately - quick contact of the client by phone or

VII. Items outstanding When the invoice is overdue, there are two options: Send a formal notice of default with a set date for payment. If the customer is facing temporary problems (cash disruptions) - alternative ways to proceed Negotiate and reach an agreement on payment deadlines; Offer a discount for early payment. When offering these possibilities the company should consider: How valuable the client is to the business; How temporary the problem is; How the measure may affect our own business and performance. Rate of interest x100 Credit period – discount period

A.Technical competences B. Workflow management C. Software requirements D. Day-to-day accounting E. New cost structure 5. Internal management – Effective payment Monitoring 13

C. Software requirements Standard office software package + software provided by bank D. Day-to-day accounting Pass records at regular intervals to tax adviser E. New cost structure Especially in case of banking transactions and with logistics companies. Factored in and reflected in the internal calculations.