B2B debt collection and B2C debt collection, what are the differences?

Collecting outstanding receivables has become increasingly complex in recent years. In the 1990s, for example, there was no real distinction between Business-to-Business (B2B) and Business-to-Consumer (B2C) debt collection. To get collection order(s) handled, you could hire a collection agency or bailiff, where a bill from the relevant collection agency was often enough to force a payment.

Today, there are a number of differences that distinguish debt collection B2B from debt collection B2C. In particular that a private debt carries with it a number of (different) obligations that give the client (read debtor) more rights than a business debtor. In this blog, we would like to explain to you the differences regarding B2B Debt Collection and B2C Debt Collection.

B2B Debt Collection

The name says it all, Business-to-Business is a commercial agreement between two companies. If a business debtor does not pay the outstanding debt, different rules apply when it comes to sending letters and handing over claims. For example, Notice of Default is not mandatory (but recommended). In principle, the claim can be immediately handed over to a collection agency after the invoice deadline has passed.

B2C Debt collection

For private claims, it is compulsory to send a WIK letter/WIK reminder. In addition, it is recommended to send this both by regular mail and by registered mail. This is to be able to prove later (in court) that the debtor actually received the letter.
The WIK letter should mention the following points:

You should state clearly and precisely why the debtor is in default and that payment from the debtor is required;

• The outstanding net amount;
• The invoice and, debtor or customer number should be named;
• The exact amount of extrajudicial collection costs and statutory interest to be charged;
• The payment term of fourteen days;
• If you are not VAT liable, you must still separately state the entire amount of WIK costs plus the amount of VAT;
• That legal proceedings will be initiated if the debtor does not fulfill the obligations.

Should you want to know more about the payment reminder, reminder and formal notice.

Then read our blog: Debtor management under the microscope: the payment reminder, reminder and default notice.

Collection costs according to the Collection Costs Act (WIK)

For business receivables, in addition to the mandatory collection costs, additional costs from the general terms and conditions may be charged.
In the case of private claims, no additional costs may be charged in addition to the mandatory collection costs. The amount of the net claim determines the amount of the extrajudicial collection costs:

How can you calculate collection costs?

The amount of the net claim determines the amount of the extrajudicial collection costs:

It is possible to deviate from this table in an agreement (except for the minimum amount).

Statutory interest %

When a debtor fails to make payment on time, legal interest is due in addition to the collection costs.

• The legal interest rate for private claims is currently 2%.
• The legal interest rate for business receivables is currently 8%.

In short
The main points from the blog are briefly summarized here. In the case of a business claim (B2B), sending a WIK letter is not mandatory. In the case of a private debt (B2C), sending a WIK letter is mandatory. The amount of collection costs for private claims is laid down in the Collection Costs Act. Organizations (B2B) may deviate from this in the agreement. Finally, in addition to collection costs, statutory interest is also due at the time the debtor fails to make payment on time. For private claims the interest rate is currently 2% and for business claims it is currently 8%.

Want to know more about this topic?
Would you like more information on this topic? Or perhaps you would like advice on debtor management and/or using a collection agency? Feel free to contact us