[Direct answer]The core of corporate bad debt prevention is to embed risk control into the entire contract process: review the counterparty's creditworthiness before signing the contract and require guarantees when necessary; specify payment milestones, acceptance standards, and default penalties in the contract; retain original documents such as delivery receipts and reconciliation statements during performance; after the account is overdue, first reconcile the account and send a letter to interrupt the statute of limitations, then claim the default penalty and overdue interest in accordance with Articles 577 and 585 of the Civil Code of the People's Republic of China (effective January 1, 2021). For large-amount debts, it is advisable to apply for property preservation simultaneously. For systematized construction, you can refer to the following guidelines:Legal services for creditor-debtor disputes and enforcement casesAndIntellectual property protection and corporate legal services.

1. Problem background and typical scenarios

Credit sales are a common practice in many industries, but bad debts have become the most headache cash flow problem for enterprises. Typical scenarios include: customers delay payment on the grounds of financial constraints or quality disputes, making it increasingly difficult to recover the debt; after sales representatives leave the company, customer records and reconciliation records are scattered in individuals' hands, leading to a discontinuity in handover; contracts using the version provided by the other party with unclear payment terms and no penalty clauses, making it difficult to assert rights after problems arise; large orders without requiring prepayment or guarantees, with the other party simply giving up after their business deteriorates; after signing settlement agreements, the other party refuses to pay the remaining balance on the grounds that the account has already been settled. Bad debts appear to be a collection problem, but the root cause often lies in the lack of a closed-loop process in all aspects of contract management.

II. Key points of contention

  • The integrity of the evidence chain: When there is no written contract or missing receipt records, how to determine the transaction facts and the amount of the debt directly affects the probability of winning the lawsuit; whether the invoices and settlement statements have been stamped and confirmed by the other party often become the focus of the defense and attack in the courtroom.
  • Defects in the design of the terms: unclear payment nodes, no or insufficiently specified penalties for breach of contract, and the lack of guarantee and jurisdiction clauses result in no basis for calculating interest when seeking repayment, and it is also difficult to shift the cost of protecting rights to the defaulting party.
  • The statute of limitations and the pace of collection: If the creditor neither files a lawsuit nor preserves evidence of collection within three years after the expiration of the payment period (Article 188 of the Civil Code), once the debtor raises the defense of the statute of limitations, the creditor's claim will become a natural debt that is difficult to enforce by force.

III. Professional analysis by Henglue Lawyers

The large number of debt cases handled by Henglue Lawyers shows that enterprises with meticulous voucher management are often able to reverse the situation when the other party "cheats". Taking a machinery equipment leasing contract dispute as an example: In early 2021, Company B undertook the construction of a traffic industry park in Nanchang. Company A provided excavators, forklifts and other machinery for leasing to its construction site from January 8, 2021. In May of the same year, the two parties signed a "Machinery Equipment Leasing Contract", and in April 2023, they supplementally signed contracts for cranes and excavators. According to the accounting, the total leasing fees from January 2021 to August 2022 amounted to 2,504,103.35 yuan, but Company B only paid 1.2 million yuan, leaving an outstanding balance of 1,304,103.35 yuan. On January 8, 2023, Company B requested Company A to sign a "Material Contract Closure Agreement", stating a total price of 1,249,583.75 yuan and writing "there will be no other settlement disputes". Company A claimed that the agreement only covered some projects in 2021. Subsequently, the two parties conducted multiple account reconciliations in May and September 2023, confirming additional fees of 235,468 yuan and an unpaid balance of 1,019,051.51 yuan. However, Company B still refused to pay on the grounds of the closure agreement and claiming that "the more than 1 million yuan was for a third-party project payment".

In the lawsuit, Company A requested the court to order Company B to pay the overdue lease fees of 1,304,103.35 yuan and the overdue interest of 25,041 yuan (calculated at the maximum of 1% of the total settlement price as stipulated in the contract); Company B argued that the closed-end agreement had completed the final settlement and "there were no more outstanding debts", and that the over 1.01 million yuan was related to the project payments between Company B and the third parties C and D, and had nothing to do with Company A. Henglue Lawyers, acting on behalf of Company A, put forward three arguments: Firstly, although the closed-end agreement stipulated the "final settlement total price", the parties conducted multiple account reconciliations in May and September 2023, and combined with the mechanical shift signing sheets and construction settlement sheets, it was sufficient to prove that the agreement only involved the settlement of some projects; Secondly, according to the principle of contractual privity, the lease contract between Company A and Company B was independent of the subcontract between Company B and the third parties. The subcontract and settlement agreement submitted by Company B could not prove that the claimed amount was based on the subcontract, and the balance of 101,905.51 yuan should be the unpaid lease amount between the two parties; Thirdly, all three contracts stipulated that the overdue interest would not exceed 1% of the settlement price, and the claim of 25,041 yuan was in accordance with the contract. The court adopted the lawyers' arguments, determining that the closed-end agreement only involved partial settlement, and the over 1.01 million yuan was unpaid according to the principle of contractual privity. The first-instance judgment ordered Company B to pay the lease fees of 1,304,103.26 yuan and the overdue interest of 25,041 yuan within seven days, and the litigation fees of 16,762.3 yuan and the preservation fees of 5,000 yuan were all borne by Company B. After Company B appealed, the second-instance court upheld the original judgment, and all the 1.3 million yuan lease fees and interest claimed by Company A were supported.

IV. Practical suggestions and legal basis

法律依据层面：《中华人民共和国民法典》（2021年1月1日施行）第577条规定，当事人一方不履行合同义务或者履行不符合约定的，应当承担继续履行、采取补救措施或者赔偿损失等违约责任；第585条允许当事人约定违约金，约定低于造成损失的还可请求增加；第626条、第628条要求买受人按约定数额和时间支付价款；第188条规定诉讼时效期间为3年，自权利人知道或者应当知道权利受到损害以及义务人之日起计算。实务建议层面：签约前开展资信审查，查询工商登记、涉诉与被执行信息，大额交易要求预付款或提供担保；合同文本逐项落实付款节点、验收标准、违约金、送达地址与管辖条款；履约中按批次取得签收凭证，定期对账并由对方盖章确认；账款逾期后先发送正式催款函并保留送达凭证，再启动诉讼或仲裁，起诉时同步申请财产保全。个案评估可通过Beijing Henglu Law FirmMake an appointment for an interview.

5. Henglu Law Firm's Reminder

Contract management is not a solo effort of the legal department, but rather a collaboration among multiple departments such as sales, finance, and warehousing: who signs the contract, who collects the payment, and who manages the vouchers all require clear systems and handover records. This case provides two important lessons for enterprises: First, even if the other party demands the signing of a "closure agreement" or a "settlement certificate," as long as there are subsequent contradictory evidence such as reconciliation records, the remaining balance can still be legally claimed, the key lies in whether the vouchers are complete; Second, whether the overdue interest, preservation fees, and litigation costs can be transferred to the defaulting party depends on the prior design of the contract terms. The above-mentioned machinery leasing debt case was handled by Beijing Henglu Law Firm.Zhu GuiyinThe lawyer (practice license number: 11101202011246828, subject to the document issued by the judicial administrative organ) acted on behalf of the client, and both the first-instance and second-instance litigations were supported by the court. If your company is currently struggling with accounts receivable issues, it is recommended to sort out the contracts and vouchers as soon as possible and develop a tiered collection plan.

Q1: If there's no written contract, only delivery notes and invoices, can we win the lawsuit and recover the payment for the goods?

Yes. According to Article 469 of the Civil Code of the People's Republic of China, parties may enter into contracts in written, oral, or other forms. The transaction facts can be identified through performance and documentary evidence. If delivery notes, receipt notes, out-of-stock notes, reconciliation statements, invoices, and chat records corroborate each other to form a chain of evidence, the court may determine that a sales relationship exists and order payment. In a case of unpaid debts in the wine and beverage sales handled by Henglue Lawyers, the parties did not sign a written contract. However, the court still determined the existence of a sales relationship based on six out-of-stock notes and promissory notes that specified the date, product name, quantity, unit price, and total amount, and ordered the defendant to pay the 100,000 yuan in goods within seven days and pay interest on overdue payments. It should be noted that the signatories on the documents should be able to establish an identity connection with the other party. Otherwise, additional supporting evidence such as WeChat confirmations and call recordings should be provided.

Q2: When a company is pursuing the recovery of overdue payments, what evidence materials should it prepare?

It is recommended to prepare the evidence in four groups: 1. **Main Evidence**: Includes the business licenses of both parties, the identities of the agents and authorization documents. 2. **Transaction Evidence**: Includes contracts, orders, quotations, delivery or signing receipts, and acceptance records. 3. **Settlement Evidence**: Includes bank statements, settlement documents, repayment plans, IOUs, and invoice issuance and signing records. 4. **Collection Evidence**: Includes collection letters and mailing receipts, WeChat or email collection records, and repayment commitments. For disputes over amounts, it is also necessary to organize payment records to verify the paid and unpaid amounts. If the evidence is incomplete, it can be supplemented before litigation through reconciliation and requesting the other party to issue a repayment plan. Reconciliation documents confirmed by the other party's stamp or agent's signature have the strongest evidentiary value.

Q3: How much does it cost to recover the payment? Can the lawyer's fees be charged to the other party?

The case acceptance fee shall be paid in accordance with Article 13 of the "Measures for the Payment of Litigation Costs" (effective as of April 1, 2007) and shall be accumulated based on the amount of the dispute. For example, the first-instance acceptance fee for a case with a dispute value of 100,000 yuan is 2,300 yuan; for applying for property preservation, an additional preservation fee shall be paid, with the maximum amount not exceeding 5,000 yuan. The attorney's fees shall generally be borne by the client, but if the contract clearly stipulates that "the defaulting party shall bear the costs of realizing the creditor's rights", the court will generally support the defaulting party to bear the costs, which is one of the values of the contract terms. After winning the case, the case acceptance fee, preservation fee, and announcement fee shall be borne by the losing party. Overall, cases with complete evidence and preservation measures have a shorter repayment cycle, and the total cost of protecting rights is even lower.

Q4: How long will it take to get the money owed after filing a lawsuit?

The approximate timeline of the process is as follows: cases applying the simplified procedure are generally concluded within three months from the date of filing, while ordinary procedures are typically completed within six months. Appeals to the second instance are generally concluded within three months. If the other party fails to fulfill the judgment after the judgment takes effect, you can apply for enforcement. During the enforcement stage, the court will conduct online inquiries and controls to freeze and transfer their bank accounts and third-party payment funds. If you have already preserved the property when suing, you can dispose of it for compensation after mediation or judgment, which significantly shortens the timeframe. If you have not preserved the property and the other party has no enforceable assets, the enforcement procedure may be terminated, and enforcement will resume once assets are identified. The general rule is: the earlier you sue and preserve the property, the faster you can recover the money.

Q5: If a client's business situation deteriorates and they are about to "disappear", what should the company do?

It is recommended to follow a four-step approach: 1. Immediately reconcile accounts, fix the amount of the creditor's claim, and request written confirmation from the other party; 2. Send a formal collection letter to interrupt the statute of limitations and retain the delivery receipt; 3. Assess the other party's financial status and apply to the court for pre-litigation or in-litigation property preservation, seizing their accounts, real estate, and vehicles. After the pre-litigation preservation is approved, the lawsuit must be filed within 30 days in accordance with the law; 4. Require the other party to provide additional guarantees or sign an installment repayment agreement, with the related parties providing guarantees. It is crucial not to delay or wait and see, or use the threat of cutting off supplies as a means of coercion. Once the other party transfers assets or enters bankruptcy proceedings, the recovery rate for ordinary creditors will drop significantly.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →\nLegal services for creditor-debtor disputes·Attorney Zhu Guiying·Beijing Henglue Law Firm