Debts and late payments can definitely cause a lot of damage to your business, and your cash flow can be drastically affected if you aren't able to collect from debtors or customers on time. But if a debtor or customer is causing you even more problems – if they refuse to pay despite all your best efforts – then it may be time to rely on the services of a debt collection agency. More businesses today are hiring the services of debt collection agencies for payment collection simply because it frees up their time for other responsibilities and pursuits, and, let's face it, having a debt collection agency handle your collections is a lot more efficient and effective in the end. But before you hire a debt collection agency, here are some essential factors you should consider first.
What is its value to you?
Before outsourcing your debt collection requirements, you should first determine – and understand – its value to your business. Think about the benefits you could attain from outsourcing this kind of service. For one, will it allow you to benefit from expertise which you wouldn't otherwise have in-house? Also, will the service allow you to regain your resources and time so you can focus on other things? Additionally, will hiring a debt collection agency gives you peace of mind knowing that your invoices are in the best hands? The good thing about debt collection agency services is that the fees are usually charged if the collection is a success, but there are also services that charge an upfront fee, so it's up to you which kind of service you would like to choose. Once you have assessed your needs and determined the value of the service to you, then it’s worth considering your options when it comes to debt collection agencies.
Decide which tasks you would like to outsource
Some companies will only make use of a debt recovery agency for debts that are proving difficult to collect, and other companies choose to outsource all the debts which have already reached a certain time frame. Of course, all businesses will have different needs, so you also need to decide which tasks you would like to outsource to the debt collection agency. You could decide, for instance, to outsource only high-value debts, or you could decide to outsource an invoice with a customer who seems to have disappeared. You could also outsource debts from a customer who already has a number of unpaid invoices. Ultimately, it’s your choice, but make sure the debt collection agency understands your particular needs and requirements and will work with them accordingly.
When is the proper time?
In debt collection, the timing can definitely affect the results. The sooner you assign a debt to a debt collection agency, the better because as an invoice becomes older, it can be more difficult for you to find the actual debtor or even prove that you have provided a service or lent money. Along with this, you need to find an experienced debt collection agency that can work closely with you and provide you with updates on the status of the case. By working with a good agency, you can get back what you are owed in no time.
Image attributed to Pixabay.comUpdated Date: 24 January 2020, 14:51