In Oman, debt recovery is a legal process and a strategic action taken by businesses to maintain their cash flow, protect their balance sheets and support the sustainable growth of their business. With the increase in international trade between Oman and other countries, businesses often operate under complex loan agreements and credit frameworks that contain many regulations governing how they operate. This makes having a recovery framework that is structured, compliant and professional, imperative for businesses in Oman, rather than just chasing after overdue invoices on an ad-hoc basis.

Debt recovery landscape in Oman

Oman’s increasing reliance on credit in almost all sectors – such as telecoms, banking, utilities, construction, and B2B (business-to-business) services – means many large companies will now be exposed to significantly greater levels of risk from receivables (money owed) than previously. 

When customers are late with their payment, that puts a huge strain on a company’s cash flow, which impacts how quickly they can complete the projects for which they were hired, and thus causes difficulties for their suppliers and employees when it comes to getting paid on time.

The characteristics of the Omani debt market are:

• The diversity among local and cross-border customers creates complexities around jurisdictions, languages, and enforcement.
• There is a growing expectation for collection practices that are implemented in a professional and ethical manner whilst protecting the brand’s reputation.

Legal and regulatory considerations

In Oman, large businesses should not only view debt collection as part of their compliance obligations; they should also take recovery of debt into account when they conduct business with foreign entities. 

To comply with Omani laws and the applicable regulations of the GCC, these companies need to ensure that contracts and related documents, as well as any communications they may have with foreign debtors, comply with Omani law.

The most important legal issues are:

• Defining written contracts clearly, including specifying all payment terms, interest rates, and how to resolve a dispute.
• Documentation for invoices, delivery notes, communications, and reminders is needed for any further escalation, including court action.
• As with all companies, respect the privacy of your customers, treat them fairly, and do not use unfair or unscrupulous methods that may result in complaints or legal liability.

Use of external specialists in debt collection, who have more regional knowledge of regulations than the in-house collections staff, ensures that larger companies can successfully recover their debts without making procedural mistakes that could delay or otherwise interfere with debt recovery efforts.

Building a structured internal process

For large companies to recruit external partners, there needs to be a strong internal credit and collections program in place. With a structured and consistent internal process, only the most problematic cases will need to go to the next level (i.e., escalation), reducing the amount of money and time wasted.

Strong internal processes should include:

• Assessing credit risk for new customers before onboarding – including dollar limits based on the strength of financials and payment history
• Automated reminders and statement cycles to help remind customers close to their payment due dates, and immediately after the due date
• Standardised escalation paths for follow-up, starting from friendly reminders through formal notices, then onto external collections/legal channels
• Central tracking and reporting for tracking ageing buckets so leadership can monitor trend lines, problem areas, and recovery performance

Through standardisation of the above, large enterprises can mitigate leakage resulting from inconsistent follow-up and reliance on the habits of individual employees.

Role of professional debt recovery agencies

It is unrealistic for all large organisations, especially those that manage thousands of individual customer accounts, to handle all of their delinquent customers through their own internal teams at an acceptable level. 

By working with a professional collection agency, businesses can utilise the expertise (including the judicial aspects), industry-specific knowledge, and advanced collections systems that an agency may have.

The following are the advantages of partnering with a Collection Agency:

1. Specialised teams are only dedicated to the collection of overdue accounts. By partnering with a specialist agency, your internal finance & operations teams have more time to spend on other core activities.
2. A systematic and multi-channel approach to collecting overdue accounts (i.e. calls, emails, short text messages, *letters), using scripts tailored to the debtor’s profile and industry.
3. Clear and transparent reporting dashboards that give you visibility into all funds collected, all active accounts, and all timelines.
4. An experienced partner will have experience in all sectors, including banks and financial institutions, telecommunications companies, utilities, and B2B services, where volume and complexity are very high.
5. An established partner will know how to keep the relationship with the customer while collecting funds.

Why AlWasl is a strong partner for Oman enterprises

By partnering with a dedicated regional specialist such as AlWasl, large enterprises located throughout Oman can minimise the effects of the economic downturn on cash flow and maintain positive customer relations. 

As specialists in providing expert debt recovery and cash flow management solutions within the GCC, AlWasl combines local market knowledge with structured, technology-based collection systems specifically designed for large-volume, complex portfolios of accounts.

As a result of their extensive experience working closely with large financial institutions, banks, and corporations, AlWasl is well-equipped to recognise the regulatory requirements imposed upon these organisations, as well as the internal stakeholder pressures that these organisations face. 

By establishing clear operating procedures, compliant communication channels, and transparent reporting mechanisms, AlWasl enables financial and risk management executives to monitor the recovery of those collections while being able to maintain full visibility and control over the recovery process.

For companies in Oman and surrounding markets, AlWasl supplies:

• Customised strategies for their various sectors/debtor types.
• Multilingual personnel who can deal with a wide variety of customer bases.
• Collecting methods that consider the ethical reputation of the organisation and align with their corporate values.

By partnering with AlWasl, large corporations in Oman will be able to convert outstanding debts into recovered cash sooner and with greater reliability, while allowing their own team members to concentrate on the growth and operational initiatives of the company.

FAQs

1. Why should large enterprises in Oman outsource debt recovery?

By outsourcing debt recovery, large businesses have access to specialised technology, processes and skill sets that an individual in-house team typically will not possess or have the ability to develop efficiently at higher volumes, which equates to better recovery rates and speed.

2. Is professional debt recovery compliant with Omani laws?

A reputable agency will fully operate within the relevant laws of Oman and the Regulatory Authority requirements. Reputable agencies will utilise documented, fair and ethical practices to both protect the interests of the creditor and provide protection for the consumer.

3. Will using a debt recovery agency harm customer relationships?

When conducted professionally and respectfully, recovery agencies can preserve relationships by providing customers with opportunities for structured conversations and realistic settlements. Rather than employing a more informal or uncomfortable method of collection, recovery agencies create a structured way for the creditor to communicate with customers.

4. What type of debts can AlWasl support with?

Al Wasl assists with various forms of business and consumer debt. These include many types of financing companies that service large businesses with different types of complexity and uncertainty across a broad sector.