Monitoring of receivables (payments) is a preventive action aimed at providing regularity of payments resulting from sales agreements with delayed payment terms, and consequently preventing the occurrence of payment gridlocks. Unlike vindication, monitoring activities are carried out before the term of payment written in the invoice. However, the notion of receivables monitoring is sometimes interpreted as action taken after the term of payment, which should rather be classified as amicable (pre-judicial) debt collection. Monitoring services are addressed to entrepreneurs who run trade with numerous partners, and who experience the problem of delayed payments by the clients. The resulting gridlocks, even minor, couple-of-days ones may interrupt the company’s financial liquidity.
Receivables monitoring is based on giving control over the flow of receivables (resulting from the issued invoice or invoices) to an outside company, which contacts the contractors (customers) in order to discipline them to make timely payments. The scope and terms of the actions taken are discussed individually with the client.