3 Ways On How A Debt Collection Agency Can Save You Money
Using a debt collection agency can save you money apart from the obvious reason of getting that unpaid bill paid
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Debt recovery can be a costly business and by knowing when to outsource this task, you can save yourself time and other costs.
The obvious reason for using a debt collector is to get that unpaid bill paid. Debts that remain outstanding outside your trading terms prevent your business from moving forward. Debt collection agencies are experts at debt recovery and significantly increase the likelihood of recovering outstanding moneys.
If you struggle to pay your creditors because of old debts then this may well contribute to a decline in business. Without sufficient funds to purchase new products everything suffers, from your gross profit to your stock holdings and in turn your assets.
Your time is money - most business owners forget that time spent on chasing debts equals less time spent on making sales. Successful businesses always focus on core business, whether that is selling your goods or providing a service. Allocating time to activities outside core business can adversely affect the growth and functionality of the business. By referring outstanding debt to a collection agency you are freeing up your time to get on with the daily operations in running your business.
It is not just your time but anyone on your staff that is involved with the debt collection process. Any time taken away from concentrating on the customer is going to cost you in the long run.
A debt you have successfully recovered not only saves you money but also the hassle of chasing the debt. By putting the debt in the hands of an agency you are saving postage costs, stationery, phone expenses and even vehicle expenses.
Fee structures of some agencies are set on a 'no collection no fee' basis. Commission is only charged as a percentage of the debt collected. This is a great incentive for the collector to ensure they get your debt paid and also means a minimal cost for you.
It is important to note that if you draft your trading terms and conditions a specific way, you can also pass on a debt collector's commission on to the debtor. Therefore you will not be out of pocket. This type of credit consultancy is a service offered by many debt collection agencies, such as Consolidated Collections Australia.
Debt collection agencies have resources that you may not have even thought about. This is because you are good at your business not only because it is what you do all day every day but because you have had special training. The same applies for a collecting agency. They are experts in debt recovery. It is what they are set up to do. You are their customer and it is in their best interest to look after you.
Customer relations can suffer if someone not conversant in the best way to recover debt tries to pursue an unpaid bill. Just as you would be reluctant to fix a mechanical fault on your vehicle without adequate training it might be wise to be as cautious about debt collecting.
It is an unfortunate circumstance when customers fail to honour a credit arrangement. But the whole process can be much smoother and easier all round if you seek the help of professional advice. If your outstanding debts remain that way after 30/60/90 days despite your attempts to recover the debt with some initial phone calls, follow up invoices and perhaps even letters of demand, then it may be time to hand the debt to a collector instead.
by: John Zukerman
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