Once your payment default has been approved and listed on CreditorWatch, there are a few important steps you should take. These help keep the credit file up to date and support your ongoing recovery efforts.
Notify Your Debtor
After you register a payment default, you should notify your debtor that it has been listed and remains outstanding.
This gives the debtor an opportunity to:
Understand the impact of the payment default
Contact you to discuss the debt
Arrange payment or resolve the outstanding amount
Using Debtor Management?
If you registered the payment default through Debtor Management, you can download a payment default notification letter.
The letter is pre-populated with the debtor and invoice details and explains:
That a payment default has been registered
The impact on the debtor's credit profile
The steps required to resolve the debt
Using the notification letter is an effective way to formally advise your debtor that the payment default has been registered and remains outstanding.
The Debt Has Been Paid
If your debtor pays the debt, whether in full or partially, you should update the payment default status.
Updating the status ensures the credit file reflects the current position of the debt.
A status update does not remove the payment default from the credit file. Instead, the payment default will display as Paid or Settled, showing that the debt has been resolved.
To learn how to update a payment default, see Updating a Payment Default to Reflect It's Paid.
The Debt Remains Unpaid
If the debt remains outstanding after you register a payment default, you should continue your recovery efforts.
This may include:
Communicating with the debtor
Sending additional collection correspondence
Escalating your recovery activity
You should also make it clear that the payment default will remain listed as outstanding until the debt is paid and its status is updated.
If you're using CreditorWatch Collect, you can streamline your accounts receivable process through automated collections workflows, tailored customer follow-ups, recovery tracking, and access to additional recovery options.
Find out more about CreditorWatch Collect
How a Payment Default Can Affect a Debtor
A payment default becomes visible to other CreditorWatch members who perform a credit check on the business.
CreditorWatch members monitoring the business will also receive an alert when the payment default is registered.
A registered payment default may also contribute to changes in the business's RiskScore and other credit risk indicators.
As a result, a payment default may affect a debtor's ability to:
Obtain credit
Maintain existing trading terms
Establish new supplier relationships