Financial Claims & Debt Collection

What do we offer in this area?

• Reviewing debt documents, instruments and judgments
• Preparing claims and following up on amicable collection
• Following up on enforcement procedures within the scope of the engagement

The scope of work and required documents are determined after reviewing the matter and agreeing on the engagement.

Collecting the business's debts: from overdue receivables to the legal claim

The debt collection service for businesses usually starts with the accounts receivable aging report held by the finance department: invoices that have exceeded the agreed credit period, a client who promises payment and then postpones it, or a supplier who received an advance payment and did not deliver. At this stage, each balance is examined individually to determine its legal basis and the strength of its supporting documents, and the appropriate path is then chosen for it rather than treating all debts in the same way.

• Dues under supply, services, and subcontracting contracts
• Overdue customer balances after the credit period ends
• Advance payments made to a supplier who did not perform his obligation
• Debts documented by a promissory note, check, or acknowledgment

Three paths for collecting corporate debts

The path depends on the type of document the business holds and the debtor's position regarding the debt:

• Amicable collection: a written demand accompanied by a detailed account statement and a deadline for payment, with consideration of rescheduling or a notarized settlement when needed.
• Judicial claim: In the absence of an enforcement instrument, the financial claim is filed before the competent court depending on the parties and nature of the dispute, taking into account the requirement under the Commercial Courts Law for prior written notice in certain claims.
• Direct enforcement: If the business holds an enforcement instrument, such as a negotiable instrument meeting its formal requirements or a notarized settlement document, an enforcement request is filed without a prior lawsuit; this is detailed on the Judicial Enforcement for Businesses page.

Debt documents and limitation periods for hearing claims

The strength of a claim comes from how well its documents fit together. A copy of the contract or purchase order, receiving minutes, invoices, an account statement showing the balance and due date of each invoice, and correspondence containing an acknowledgment of the debt or a promise to pay are all requested. The article Documents for Supply and Payment Claims helps organize the file before it is reviewed.

An overdue balance should not be left unaddressed for a long period; a commercial lawsuit will not be heard after five years from the arising of the right, except with the debtor's acknowledgment or an excuse the court accepts, and negotiable instruments have shorter special time limits. Details are in the article Limitation Period for Commercial Claims.

The role of the finance department before a client defaults

Collection becomes much easier when its tools are built before default occurs: stating payment due dates, the effect of delay, and the dispute-settlement method in the contracts, having the client sign periodic account statements, and taking guarantees proportionate to the amount of credit extended. For new promissory notes, it is worth noting that the new Enforcement Law, expected to take effect around late October 2026, requires their registration on the national electronic platforms for them to qualify as enforcement instruments; see the article The Promissory Note under Saudi Law.

Frequently asked questions

Can a business collect a debt without filing a lawsuit?

Yes, in two cases: if the debtor responds to the amicable claim by paying or signing a documented settlement, or if the company holds an enforcement instrument such as a negotiable instrument meeting its conditions or a documented settlement deed, the enforcement request is filed directly via Najiz. Invoices and account statements that the debtor does not acknowledge usually require a court judgment before enforcement.

What Documents Does the Finance Department Prepare to Collect a Delinquent Client's Debts?

The contract or purchase order, delivery reports, invoices, a detailed statement of account with due dates and amounts paid, correspondence containing an acknowledgment of the debt or a request for extension, and any guarantee or instrument the company obtained. Also add the company's commercial registration, and a valid power of attorney for whoever follows up the file on its behalf, including authority for claims and enforcement.

Does the office handle claims for businesses in other regions of the Kingdom?

The office attends in person in Riyadh and Jazan, and handles companies' files in the rest of the regions remotely, since filing cases, enforcement requests, and exchanging memoranda are all done electronically via Najiz, and many sessions are held in writing or by video. Personal attendance is agreed upon in advance for cases that require it, with that specified in the scope of engagement.