Regardless of domestic or foreign transactions, while the relationship between the two companies is successful, the frequency of contact is high and the response of the other party is quick. Even in overseas, in the case of an e-mail, there are replies on the same day in areas with small-time differences such as China and Asia but in other areas, the reply will often come on the next day.
However, when payment is delayed, situations are different. There will be no response even after 2 or 3 days, after being reminded several times, after a week or so you will receive a short email with 1 or 2 lines.
This is evidence that the importance of your company among suppliers is decreasing. Since it has become less important, the reply is being delayed. Payment is the same, it will be postponed later.
Perhaps, there may be a mental state that it is somewhat difficult to reply, as there is anticipation to delay payment from now on.
In addition, it is also important to note that you will not be able to get an answer for questions or small requests from here. It's likely that the customer is bothered and annoyed to work with your company, which means there will be a fall in priority.
Such events may not necessarily be signs of delay. However, taking appropriate measures at an early stage without losing sight of these minor signs will prevent the occurrence of delayed debts. It is important not to be bothered but to pursue a few questions.
"Request to change payment terms" is also a dangerous sign. There are numerous creditors who are unable to collect a debt due to the easy response to change requests.
In particular, it is important to keep in mind that customers will also have plausible reasons, such as “L/C establishment costs are high” and “L/C is complicated in documents”. Certainly, letter of credit also has a high establishing cost and the documents are complicated. Since the bank guarantees the payment, every word and every mistake cannot be tolerated. Alternatively, in business transactions, it is quite natural to ease the terms of payment depending on the transaction results.
However, the reality is that business conditions have deteriorated and banks may not be able to establish letters of credit. Credit status is one, it is required to provide collateral for establishing a letter of credit but it may not be possible to provide collateral. You do not say that you did not receive a change request but it is not a good idea to respond easily. If there is a change request, make sure to conduct a credit check of the customer again.
Also, “discovery of collection agency history” is a dangerous sign. Depending on the number and amount of the debt, it would be reasonable to see that the debtor's ability to pay has declined considerably.
Of course, there are some companies which are outsourced to semi-automatically for accounts overdue over three months, which are stipulated by the credit policy. Even so, using a collection agency will result in expenses such as contingent fees. Naturally, gross profit blows away. If you want to recover some of the cost, it can be guessed that it will be more difficult for debt recovery.
In this sense, it is a sign that cannot be overlooked in overseas debt collection.
