How Are a Company's Receivables Collected?

How a company collects receivables arising from its commercial activity depends on the document underlying the claim, which determines the enforcement route to be followed.

Enforcement Based on a Negotiable Instrument

If the receivable is based on a negotiable instrument such as a cheque or promissory note, enforcement proceedings specific to negotiable instruments can be initiated under Article 167 et seq. of the Enforcement and Bankruptcy Law (İİK). Because the debtor's objection period (five days) and the permissible grounds for objection are limited, this route generally produces results faster than ordinary enforcement.

Ordinary Enforcement Without a Court Judgment

If the receivable is based on an invoice, a contract or a current account statement, enforcement proceedings without a prior court judgment are initiated under İİK Art. 42 et seq. The debtor can object to the payment order within seven days; the objection suspends the proceeding, and the creditor must then apply for annulment or removal of the objection.

Securing the Receivable Through Precautionary Attachment

Where collection of the receivable is at risk — for example, where the debtor attempts to conceal assets — a precautionary attachment order can be obtained from the court under İİK Art. 257, allowing the debtor's assets to be seized before enforcement proceedings even begin. The main enforcement proceeding must then be initiated within a specific period after the precautionary attachment is executed.

Managing a Bulk Receivables Portfolio

For companies with a large number of customer receivables, prioritising files according to collectability and limitation-period risk, using a standard enforcement template, and regular reporting directly affect the collection rate.

Practical Recommendations

Keep the document underlying your receivable (negotiable instrument, invoice, contract) complete and intact, and track the applicable limitation periods, as the limitation period for negotiable instruments is shorter than for ordinary receivables. Working with a lawyer to build an enforcement strategy suited to the size of your receivables portfolio speeds up the collection process.

This article is for informational purposes only and does not constitute legal advice. Please contact our team regarding your specific situation.