ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

Payment guarantee
Many of our customers operate businesses
that involve extending large amounts of credit
to end customers, and financial risk can
therefore arise.
One example could be a company that
wishes to offer payment by invoice for its
webshop. To ensure the payment of the
transaction, we offer services that provide a
payment guarantee based on a credit decision
and credit limit monitoring.
By using Intrum Justitia’s stored information,
the company can check at the time
of the sale if the customer is creditworthy
and offer bespoke payment options. If the
customers decides to pay on credit, Intrum
Justitia can guarantee that the company
will receive the full amount for the sale. We
take over invoices that become overdue and
handle them as normal collection cases.
BETTER CASH fLOW
AND LESS ADMINISTRATION
Because our clients are guaranteed payment
when unpaid invoices are overdue, they do
not put their cash flow at risk or use their
own resources for the administration of reminders
and collection cases.
Purchase of receivables
More and more of our clients are taking the
opportunity to sell portfolios of outstanding
receivables. By purchasing receivables,
Intrum Justitia frees up resources for clients
and speeds up cash flow.
Purchasing overdue receivables is a logical
step in managing receivables that, despite
collection and other measures, have
not been paid and have therefore become
a credit risk for the client. Examples could
be trade receivables or unsecured loans between
companies and private individuals,
or between companies. The clients customer
is still liable for payment, but the
cost of collecting payment is considered so
unpredictable and the creditor would have
to write off all or part of the debt. The receivable
still has financial value, however,
and can be sold to a third party who continues
to attempt to collect payment.
IMPROVED LIQUIDITY
The benefit for our clients is improved liquidity
because they get paid for a portion of the
receivable immediately and thereby avoid
the risk of receiving no payment at all. The
<
Our financial services offering
benefit for us is that we can continue with
more long-term collection measures on our
own behalf and for the client’s customer it
becomes easier to become free of debt since
we can help to gradually lower the debt in
various ways, for example through payment
plans. Intrum Justitia purchases portfolios
after making an assessment of when and how
much of the debt in the various cases will be
paid. The price we pay for the portfolio is
based on this forecast. Depending on age and
quality, the amount can be significantly lower
than the amount of the receivable. Typically
the price may be around five to fifty percent
of the receivable’s nominal value.
After purchasing a portfolio, individual
collection scoring that the various cases are
handled through an action network which
optimizes recovery. This action network determines
who will receive a letter or phone
call, a payment plan structure, and which
cases will be left alone for the time being. By
monitoring the period of limitation, keeping
in frequent contact with the debtor, and finding
the best solutions for all parties, even old
debts can be paid.
EXTENSIVE SERVICE PACKAGE INCLUDING PAYMENT GUARANTEE
In Switzerland Intrum Justitia and Debtors Service Ltd (a subsidiary of Swiss
Post) offer clients a complete payment guarantee solution. This service,
called factoring Plus, includes managing sales ledgers, pre-financing and
payment guarantees. The sales ledger management service also includes
creditworthiness checks, accounting and reminders. Intrum Justitia is responsible
for delivering creditworthiness checks and payment guarantees.
factoring Plus is well suited for e-commerce companies and businesses that
offer invoicing services and that quickly need access to liquid funds.
19