Maintaining a positive cash flow plays a vital role in ensuring business success. But how will you do this if your debtors don’t pay up on time?
In a perfect setting, your firm should receive payments for the goods and services it offers. Unfortunately, this is rarely the case in the real world. Yes, some clients will settle their accounts on time, but others aren’t as reliable.
Each day, the growing list of unpaid invoices increases. The issue is, the ability to collect these debts decrease by each day. At this point, you’re in a dilemma, do you manage the critical day to day tasks or chase after delinquent accounts. Truth is, you can’t manage your firm and chase after defaulters.
Fortunately, there’s a solution to this problem- a debt collection agency. Outsource the collection process to a government collection agency or a third party. The following are the main reasons why engaging a debt collection service is a smart move for your firm.
1. Time and Focus
As a business owner, you’ll have a lot of roles and duties on your plate. Unlike you, the account receivables collection agency has one aim, to recover debts.
The debt recovery agency has the time, energy, and resources to contact your debtors. Such debtors may be persons, businesses, or governmental agencies. Statistics show that 16% of what the agency collects is from the government.
The undivided attention in a government collection agency guarantees quality results. With this, your overdue accounts get the necessary attention to recover your money.
2. Highly Flexible
A professional government collection agency understands your firm’s diverse needs. As such, the agency will offer a wide variety of debt collection packages. All you need is to select the right package that best suits your business model.
Some government collection agency will pursue your debtors for a fixed price. Others will require a commission for the amount they collect. If you want to maximize your collection budget, the latter will be highly effective.
Alternatively, you write off the debts by selling them to a collection agency. Always look for an accounts receivable collection service that’ll help you with this.
3. Detailed Documentation
A debt collection service keeps vital contact records on your debtors. The documents will be useful if you decide to sue the debtors. With these records, convince the court of your extensive efforts to secure payments.
Such information is also helpful if you decide to write off your debts. It will show you did your due diligence to collect your pending payments.
4. A Variety of Debt Collection Methods
Debt collectors invests on efficient tools and strategies to recover your money. For example, if a customer severs their contact details, you cannot get to them anymore. A recovery agency will come in handy via the use of skip tracing to get their new contact details.
Further, the government collection agency has access to a public record database. With this, they’re able to update your debtors’ contact details. This allows them to move to a closer resolution on the outstanding amount.
5. Adds a Sense of Urgency
Yes, most debtors have an idea of what collection agencies can do to them. Such a negative reputation is a blessing in disguise. People act fast when they receive calls and emails from reputable debt collectors.
The act is like a wakeup call to your debtors. It shows them you’re pressing on your resolve to recover money owed to your firm. It tells them that you’re not ready to write off the debt and forget. The added sense of urgency motivates debtors to clear their overdue accounts.
Having a reputable debt collection agency manage your outstanding payments offers a lot of benefits. The collection efforts are highly efficient, minimizing the risk of losses. It also frees up your time helping you focus on important business matters. Use this opportunity to steer your business to growth and success.