5 Reasons Why You Might Need A Debt Collection Agency
How long do you leave bad debts before start to get serious about collection
? What lengths do you go to make sure that they get paid in the end? Sometimes it is simply more practical to call in the experts if you want to improve your cash flow and focus on your core business activities. If you are continually chasing debts, this means inefficiently allocating your valuable time. Debt collecting is taking you away from your core business. A
debt collection agency can handle the situation in a professional manner and with specific expertise. This may be well worth the costs once you see some positive results.
Here are five reasons why you might need to contact a debt collection agency.
Shows you are serious about collection
How frustrating is it for you when the customer continues to ignore all your reminder notices? You may have even phoned or visited the customer in an attempt to see why your bill has not been paid.
If you have been diligent with your efforts to retrieve your bad debt it may be worth your while handing the debt over to a debt collection agency. Demand letters and telephone calls from such agencies increase the seriousness of your debt and highlight to the debtor that you are serious about recovery.
Furthermore, most debt collection agencies are strategically aligned with legal firms and can send demand letters on solicitor letterhead.
Allows you to focus on core business
By allocating your debt to debt collection agency after an agreed timeframe (ie 30/60/90 days), it will ensure that you are not wasting valuable time on collection. Since collection is not your core business, this will allow you to focus on what you do best and leave collection to the experts.
No Down Side
There is no down side in employing the services of a debt collection agency. Most agencies (such as Consolidated Collections Australia) offer their services on a 'no collection no fee' basis. Therefore, you will not pay unless the agency collects.
It is important to note however that you can draft your business trading terms in a way to pass on any debt collector fees on to the debtor. This will mean you will not be out of pocket at all. Speak to your debt collection agency about this.
Don't have the time
Debt collection is a time consuming task and needs to be done properly. Decide at the beginning if you (or your staff) have the time to follow up on bad debts. Do you really want precious hours being wasted on debt collection if an agency can do the job cheaper and with less hassle for you and all involved?
Don't have the resources
Agencies have the resources and know how to negotiate for outstanding debts. They also have specific debt collection techniques devised over numerous years of experience to give their clients the greatest chance of recovery.
If you struggle with any of the basic needs to recover debt, it will be preferable to your business to put the debt in the hands of someone who knows what they are doing.
Think carefully about the avenues you have tried and, once you have exhausted all other options, look closely at external sources for your debt collection. It makes good business sense to get that ageing debtors list back to 30 days or within your trading terms.
by: John Zukerman
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