What to do if a customer goes bankrupt and there are still outstanding invoices?

Imagine you have multiple invoices outstanding with a debtor and you are later told that they are going bankrupt. It is a nightmare for many (SME) companies. Bankruptcy can have major financial consequences, especially if significant amounts are at stake. What now? 

We list the most important matters for you 

1. Make sure you have all invoices and documents complete. 
↳ After the bankruptcy has been declared, the trustee takes over the authority, payments are (temporarily) frozen. 

2. Submitting your outstanding invoices is the first step, you can do this yourself or have it done. 
↳ Make sure you have complete documentation and don't forget to send your final reminder. 

3. Have you delivered goods? Then check whether there may be a retention of title and report this to the trustee. 
↳ Make sure you have an up-to-date version of your general terms and conditions and, if in doubt, have a lawyer check the retention of title procedure. 

4. If your customer goes bankrupt, this will have consequences for your cash flow, but take into account any VAT that may be reclaimed. 
↳ Following up on outstanding invoices is essential, and certainly when you want to reclaim the VAT, it is important that you document this properly. 

Do not forget to write off the invoice correctly in your administration. Have you already paid the VAT on the amount due on the invoice? Then you can reclaim the VAT on a subsequent VAT return. 

If you have any questions about the above, please contact us for a consultation without obligation.