Bulgaria and Romania are at the bottom of the ranking regarding regular payments in the European Union, show data of the annual survey of EOS GRUP entitled European Payment Practices in 2014 held in 12 EU member states. It is mainly due to the economic crisis. However, the payment habits of the end clients and the business should change, too, reads one of the conclusions in that survey. In Germany, France and Spain for example the customers pay their bills on time, while in Bulgaria, Romania, Slovakia, Greece and Great Britain the creditors have to be more patient towards bad payers, says Chairwoman of the Association of Collection Agencies in Bulgaria Rayna Mitkova upon presenting the information of the European survey. In her words, Bulgaria places last in terms of financial discipline in trade and the service sector.

“In 2014 the Bulgarian and Romanian companies top the European ranking of overdue payments. Practically 70% of all invoices are paid on time in Bulgaria, 25% of the payments are overdue and 5% of them were written off as payments which can not be collected. The situation is similar in neighboring Romania. Germany is the EU country with highest percentage of duly covered payments. 83% of the total payments in that country are made on time, 16% of them are overdue and only about 2% of all payments are written off. France is also a good example where 80% of payments are made without delay. As a whole the payments are made quicker in Western Europe as compared to those in Eastern Europe.”

Most Bulgarian companies claim that they fail to pay on time due to the lack of cash money on the one hand and delayed payments from their own clients on the other, which pushes such companies in a vicious circle. 35% of the citizens say they delay payments due to unemployment and 31% say they refuse to pay on time on purpose, Mrs. Mitkova further points out. In her words, the deadline given to Bulgarian companies to pay their overdue debts is among the shortest in Europe and will become even shorter in the future. Bulgaria places second after Poland in Eastern Europe in this indicator. The companies in the industrial sphere give their clients the longest deadline to pay their debts (40 days), followed by the service sector (37 days) and trade where the firms give 34 days to their clients to pay. However, the collection of the overdue debts depends on the efficiency of the private collection companies in Bulgaria, used by the enterprises to collect debts on their behalf, Raina Mitkova told Radio Bulgaria. In her view, if the companies approach the clients politely and both sides try to find a joint solution to the problem, the clients are more inclined and willing to pay their debts.

“Unfortunately, we still remember the look of the big, bald-headed guys with leather jackets – Mrs. Mitkova reminds about the methods used by the companies in the 90s to collect debts. Now money is collected in a civilized manner as in all other countries round the world. The client receives an SMS in the first days of the delay. A text message reading “Please call or pay until…” reminds the debtor that he has a pending payment. If the SMS does not work, the client receives a telephone call where collectors try to find out what are the reasons for the delay: the debtor could have forgotten to pay, or the delay could be due to a lack of money or simply negligence. Sometimes we have to call our debtors several times to find out whether they would pay or not. After 3 months of delay we send people to visit the client at work or at home. If all efforts are fruitless, most creditors initiate a lawsuit against their debtors. Some of the debts are collected, other are not. These are the legal steps the companies use to collect debts. However, the attitude of the creditor towards its client is very important. We always try to show respect and keep the dignity of our clients. No one can be sure that they would not find themselves in similar situation. Our experience shows that people are more inclined to pay their debts, if we treat them right.”

What are the actual results?

“Our experience shows that the collectibility rate varies in different spheres. In finance for instance the companies manage to collect 100% of overdue payments in the first months of the delay through SMS, telephone calls, letters and E-mails. The companies find it harder to collect old debts. The telecommunication companies usually use the services of external firms after the third month of delay. The success rate in this sphere is different. It could reach up to 30%. It all depends on the type of industry and how much the creditors wait to collect their debts.”

English version: Kostadin Atanasov