[Direct answer]In the Beijing area, when dealing with long-term outstanding receivables, it is recommended to proceed in four steps: "fixed reconciliation, traceable collection, statute of limitations management, and litigation preservation". The first step is to complete the reconciliation with the other party and have them confirm the amount of the debt, forming a written reconciliation letter or confirmation form, and, if necessary, stamping it with the official seal. The second step is to collect the debt through written collection letters, lawyer's letters, etc., and keep the evidence of sending and receiving them. This not only helps recover the payment, but also may interrupt the statute of limitations. The third step is to manage the statute of limitations. According to Article 188 of the Civil Code of the People's Republic of China (effective January 1, 2021), the general statute of limitations period is three years; according to Article 195, if the right holder requests the obligee to perform, the obligee agrees to perform, initiates litigation or applies for arbitration, etc., it will interrupt the statute of limitations. The fourth step is to promptly sue and apply for property preservation against those who have the ability to pay but refuse to do so, to prevent the transfer of assets. Enterprises should also pay attention to the completeness of evidence, including contracts, delivery notes, acceptance notes, invoices, and correspondence.

1. Problem background and typical scenarios

The long-term outstanding accounts receivable is a headache for many enterprises. Typical scenarios include: customers facing operational difficulties and repeatedly delaying payments; sales representatives leaving the company, resulting in missing reconciliation materials; unclear contractual provisions and difficulties in determining the conditions for acceptance and payment; repeated verbal reminders without written records, only to realize the risks when the statute of limitations is approaching; and assets still existing under the other party's name but being seized by other creditors due to delays. In the Beijing area, disputes over sales contracts and contractor contracts between enterprises are relatively concentrated, and the courts strictly review the completeness of evidence and statute of limitations defenses. Unclear reconciliation and the passage of the statute of limitations often directly result in enterprises losing the right to win the case, so the daily management and timely disposal of accounts receivable are equally important.

II. Key points of contention

First, how to fix the amount of the creditor's claim through reconciliation. Second, when does the statute of limitations begin to run, and how is it interrupted and recalculated? Third, whether the payment conditions agreed in the contract have been satisfied. Fourth, whether disputes over the quality of the goods or the delivery of the goods can be used as reasons for refusing to pay. Fifth, the conditions for property preservation and the types of guarantees. Sixth, how to deal with the situation where the other party has no assets during the enforcement stage. These issues determine whether the accounts receivable can be recovered and the recovery rate.

III. Professional analysis by Henglue Lawyers

Henglue Lawyers advises enterprises to proactively manage their accounts receivable. Firstly, prioritize account reconciliation. The account reconciliation letter should specify the contract number, transaction period, and amounts received and unpaid, and require the other party to sign and confirm. Even if the other party does not sign, their partial payments or written responses can also serve as evidence of acknowledging the debt. Secondly, keep records of collection efforts. In addition to serving as a reminder, the lawyer's letter can also apply contractual pressure and provide evidence of interrupting the statute of limitations. When sending the letter, it is advisable to choose a method that can prove delivery. Thirdly, manage the statute of limitations. Enterprises should establish an accounts receivable ledger, mark the aging of accounts and statute of limitations points monthly, and take timely action when reaching critical thresholds. Partial payments or repayment commitments from the other party constitute an interruption of the statute of limitations, and corresponding evidence should be preserved. Fourthly, initiate litigation and preservation measures. For clients who are still operating but refuse to pay, promptly filing a lawsuit and applying for preservation measures can significantly increase the probability of recovering payments. For clients who are already insolvent, evaluate the cost of litigation and the prospects of recovery to avoid futile efforts. Fifthly, manage evidence effectively. Systematically archive contracts, orders, delivery and acceptance documents, invoices, account reconciliation letters, and collection records to form a complete transaction chain. If enterprises can clarify payment conditions and breach of contract liabilities at the beginning of the transaction and stipulate dispute resolution methods, it will greatly reduce the difficulty of collection in the later stage.

IV. Practical suggestions and legal basis

Action recommendations: First, establish a ledger for accounts receivable, marking the aging period and statute of limitations; Second, regularly reconcile accounts with customers and obtain written confirmations; Third, send collection letters or lawyer's letters to overdue accounts in a timely manner and keep records; Fourth, promptly sue debtors who have the ability to pay and apply for property preservation. For related services, please refer to the following link:Creditor's rights and debts, and enforcementAndBusiness and contract disputes in enterprisesColumn. Legal basis: Articles 188, 195, 509, 577, and 626 of the Civil Code of the People's Republic of China (all effective from January 1, 2021), and the provisions on property preservation in the Civil Procedure Law of the People's Republic of China (amended in 2023, effective from January 1, 2024). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

Firstly, reconciliation is the first step in enforcing fixed claims, and written confirmation can significantly reduce the difficulty of providing evidence. Secondly, the statute of limitations is generally three years, and collection efforts and the other party's promise to repay can lead to an interruption of the statute of limitations. Thirdly, litigation and preservation of evidence are an effective combination to increase the recovery rate, and it's better to act sooner rather than later. Fourthly, the contract should clearly stipulate the payment conditions, the penalty for late payment, and the dispute resolution method. If you need to learn about the collection and litigation solutions for accounts receivable, you can contact us through the following channels:Creditor's rights and debts, and enforcementAndBusiness and contract disputes in enterprisesFor column consultation, please contact us.Beijing Henglue Law Firm.

VI. Frequently Asked Questions

Q1: Can I still sue for the overdue accounts receivable that have been outstanding for several years?

It depends on whether the statute of limitations has passed. Generally, it is three years, calculated from the date when the right holder knows or should have known that the rights have been infringed and the obligee has defaulted. If there are collection actions, partial payments from the other party, or written confirmations of the debt during this period, the statute of limitations will be interrupted and recalculated. It is recommended to first sort out the transaction records and evaluate the status of the statute of limitations before deciding whether to sue.

Q2: What should I do if the other party refuses to sign the reconciliation letter?

Creditors can still secure their claims through other means. For example, the other party's payment records, emails or chat records acknowledging the debt, responses to previous account statements, etc. Sending an account statement and keeping the delivery receipt can also be used as a basis for claims in litigation. If necessary, the delivery can be enhanced with a lawyer's letter or notarization to increase the evidentiary value.

Q3: What are the requirements for applying for property preservation?

Generally, it is necessary to provide preliminary evidence to prove the existence of the creditor's rights and provide guarantees. The guarantees can take the form of cash, real estate, or liability insurance for preservation. If the court finds that the conditions are met after review, it will order the seizure, attachment, or freezing of the relevant property. It is advisable to apply for preservation simultaneously with the lawsuit to prevent the other party from transferring assets.

Q4: What should I do if the other company doesn't have the money?

It is possible to verify whether the shareholders have fully paid their capital contributions, whether there are cases of withdrawing capital contributions or identity confusion, and to hold the shareholders accountable if necessary. It is also possible to pay attention to clues about the company's assets, such as accounts receivable, bank accounts, and real estate. If there are indeed no assets, it is possible to apply for terminating the current enforcement and resuming enforcement after the assets are found, while evaluating the litigation costs and the expected recovery of the assets.

Q5: How to avoid accounts receivable turning into bad debts?

It is recommended to investigate the customer's creditworthiness before making a transaction, and to clearly specify the payment terms, default penalties, and dispute resolution methods in the contract; to keep the order, delivery acceptance form, and invoice during the transaction; to regularly reconcile accounts and establish an aging ledger after the transaction, and to collect overdue payments in a graded manner. When necessary, introduce lawyers to participate in contract review and collection to reduce the risk of bad debts.

The above Q&A is mainly based on the judicial practice in the Beijing area. There may be differences in the interpretation of the law in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence, to avoid missing the statutory time limits. →Legal services for creditor-debtor disputes·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.