In accounting, "collections" refers to the process of recovering payments that are past due. For a business, it means the structured effort to turn outstanding receivables back into actual cash — from the first overdue reminder through to legal enforcement if necessary.
That definition sounds simple. In practice, collections becomes complex the moment a debtor crosses a border. If your company is based in the US or UK and your debtor is in Spain, "collections" suddenly involves a foreign legal system, a different language, unfamiliar enforcement mechanisms, and commercial customs that don't match your domestic experience. The word is the same. The process is entirely different.
How Collections Works for International Creditors
The collections process for cross-border B2B debts follows three stages, each with its own tools and costs:
Internal collections (days 1–60). Your own accounts receivable team sends reminders, makes calls, and escalates internally. This works for most domestic debts. For international debts — particularly in Spain — it rarely works beyond extracting a few vague promises. The debtor knows your team has no local enforcement capability, and they act accordingly.
Professional collection (days 30–120). A collection agency based in the debtor's country takes over. They bring local presence, language capability, legal knowledge, and the credibility of someone who can actually appear at the debtor's office. This is where the majority of recoverable international debts get resolved. The shift from an email from abroad to a phone call from down the road changes the debtor's arithmetic overnight.
Legal collection (120+ days). When professional amicable efforts fail, the case moves to legal proceedings. In Spain, this typically means the monitorio payment order for undisputed debts or juicio ordinario for contested claims. Legal collection adds cost but provides the enforceable judgment that voluntary negotiation could not achieve.
Why "Collections" Means Something Different in Spain
Spain's commercial payment culture operates on different assumptions than the US, UK, or Northern Europe. Payment terms that would trigger immediate escalation in Germany might be considered normal business practice in Spain. Late payment — defined by Ley 15/2010 as anything beyond 30 days (or 60 days by contractual agreement) — is technically a statutory violation. In practice, the average Spanish B2B payment arrives weeks past the due date.
This cultural context matters because it affects collection strategy. An agent who understands Spanish payment norms can distinguish between a debtor who pays late because that's how business works in their sector and a debtor who has no intention of paying at all. The first requires patience and structure. The second requires immediate escalation.
When to Move From Internal to Professional Collections
The threshold is simpler than most businesses think. If the debt is more than 60 days past due and the debtor is in another country, professional collection should begin. Waiting beyond 90 days materially reduces the probability of recovery. Waiting beyond 180 days often makes the difference between a recoverable debt and a write-off.
Most professional agencies work on no-win, no-fee terms for commercial debts, which means the only cost of early engagement is the time spent providing documentation. The cost of late engagement is the debt itself.
FAQ
What's the difference between "collections" and "debt recovery"?
In practice, the terms are interchangeable in a B2B context. "Collections" tends to refer to the full process from first overdue notice onward. "Debt recovery" often implies the professional or legal phase. Either way, the goal is the same: converting an outstanding receivable into payment.
Can collections affect my relationship with the Spanish debtor?
Professional collection done well can actually preserve relationships. A skilled agent presents the process as a neutral commercial resolution rather than an adversarial action. Many business relationships survive — and improve — after a structured collection resolves a payment dispute that was poisoning the relationship through silence and avoidance.
Alan Perez
💥 World citizen / 🛵 Tourist, Senior Debt Collection Manager, Business Debt Claims Expert
