Debt Collection for Trust & Fiduciary Services: Five Aspects to Prevent Overdue Accounts

140827 blog amicable collections 7Collecting in trust and fiduciary services can be a complicated matter. Mobility of clients, liability issues, contracts management, and impact of jurisdictions are amongst the reasons.

Below I point out five aspects to focus on, which will help prevent overdue accounts in the trust and fiduciary services sector and will eventually decrease write offs.

Due diligence and compliance

Make sure that it is clear to you, as the service provider, who the ultimate beneficial owner (“UBO”) of the client company actually is. Which are his or her commercial and legal records, what is his or her domestic business about, and what is the size of the business.

Contract management

Make sure that the management agreement (in combination with possibly a letter of indemnity) for the company is clear on liability on the UBO’s side for overdue invoices and costs, and that it is set out that you will charge interest and collection fees to the beneficial owner as guarantor.

Relationship management

In the commercial relationship, you should make your interest matter. At all times build up a personal relationship with the client directly, even if the deal is brought to you by an intermediary. You should know contact details like domicile, email, telephone, cell phone and Skype. Update contact info constantly.

Receivables management

Don’t wait too long with taking action if a client company stops paying invoices. Experience has learned it will only get worse. If a client shows bad payment behavior, ask if and were possible for a costs and expenses advance before carrying out further work for the client company and its UBO.


Please be aware of the jurisdiction your client is in and adjust your contract management and receivables management accordingly. There can be huge differences between countries as to the effectiveness of a contract. In addition, some countries may be subject to foreign currency exchange rate restrictions which may complicate payments. Other countries have laws that differ substantially for countries which typically host trust and fiduciary services providers.

While acknowledging the difficulties in collecting in the trust and fiduciary services sector, if the focus is on, and one combines efforts on, due diligence and compliance, contract management, relationship management, receivables management and jurisdiction, the trust and fiduciary services provider may prevent as much as possible overdue accounts, and at the long run decrease write offs.

If you are interested in learning more on the subject of debt collection for the fiduciary service sector please connect on Linked-In or follow me on Twitter.

To participate in the conversation about debt collection in Latin America and the Caribbean please join the Linked-In Group Debt Collection Latin America.

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