Since Oct. 1, 2024, the cumulation of collection costs regulation has been in effect, an important change within the Quality Collection Services Act (WKI). This regulation aims to increase transparency and fairness when calculating collection costs, especially when it comes to overdue payments of smaller installment amounts. But what does this mean for your organization? And how can you prepare your processes accordingly?
What does the cumulation scheme mean?
The cumulation scheme introduces a reduced rate for collection costs for successive missed deadlines within a six-month period:- For the first missed installment, the standard fee continues to apply, with a minimum of €40.
- For successive missed installments, the collection fees are halved, with a maximum of € 20 per installment.
- For amounts above € 266.67, the standard scale of collection costs continues to apply.
This prevents debtors from paying disproportionately high collection fees for multiple smaller debts. For businesses, however, this means that proper administration is essential, as each installment must be calculated and reminded separately.
Implications for your debtor management
The new regulation requires an overhaul of several components within your accounts receivable management and billing process:
- Adapting software
Many current software packages for invoicing and receivables management are not set up for the specific requirements of the cumulation rule. By switching to software solutions that support dynamic and compliant billing, you will avoid problems. - Contracts and general terms and conditions
With the new regulation, it is important that your general terms and conditions and contracts are in line with the changed collection rules. Lack of clarity in this regard can lead to discussions with customers or legal risks.
Advice: Have your general terms and conditions and contracts legally checked and make sure they contain clear agreements on payment terms, collection costs and follow-up in case of non-payment. - Process for ordering and invoicing
Correct invoicing is essential to avoid discussion about overdue payments. Using Smart e-Invoicing makes this process not only more secure and compliant, but also more customer-friendly. Smart e-Invoicing offers more than traditional invoicing. For example, the system automatically recognizes whether an invoice is already with a collection partner, takes into account upcoming payments and offers the ability to proactively make payment arrangements. This helps prevent escalations and rising costs, while providing transparency to debtors and strengthening customer relationships. - Debtor management and escalation
The cumulation rule requires you to send a separate WIK letter for each missed installment before turning over a file to a collection agency. This requires an efficient and automated accounts receivable management process.
Advice: Consider automated workflows for reminders, dunning letters and generating WIK letters. This will save time, prevent errors and make your process compliant with the law.
Before handing over to a collection agency
Before you can transfer a file to a collection agency, you must meet the legal requirements:
- Send a WIK letter for each missed deadline with the correct amounts.
- Make sure all documentation is complete, including contracts, invoices and communications with the customer.
- Make sure you have calculated collection fees correctly according to the new rules.
What step can you take now?
The cumulative collection fee rule requires a proactive approach and a well thought-out debtor management process. Start by evaluating your current processes and ask yourself the following questions:
- Are my contracts and terms and conditions aligned with the latest regulations?
- Is my invoicing system ready for the dynamic requirements of the cumulation scheme and Smart e-Invoicing?
- Do I have a clear plan for following up on missed payments and sending WIK letters?
Contact BVCM to optimize your processes. Our solutions, such as an integrated Order to Cash platform including Smart e-Invoicing, help you stay compliant, minimize legal risks and strengthen your customer relationships.
Together, we ensure compliant and effective accounts receivable management.
