Why Sending an Account to Collections Is Good for Your Company’s Health
What could your company do with the money recovered from all your overdue accounts?
- Pay your staff; hire more staff?
- Pay your vendors; invest in new technology?
- Pay your operational expenses; expand your facility?
- Invest in marketing and promotion; create a new website?
- Depend less on loans/credit lines
Employing a professional debt collection agency is an effective way to recover payment on those past-due accounts, which increases cash-flow and allows business to have the funds needed to pursue its goals.
Here are just some of the ways a professional debt collection agency to can improve your company’s financial health:
- Free-up valuable time and resources, allowing you to focus on what’s important — growing your business.
- Debt collection is not just one of many tasks collection agents do – it’s all they do. Employing tried-and- true methods of debt collection increases your chances of recovering overdue accounts. That’s money you can use to continue the seamless operation of your business – or invest in future growth.
- A debt collection specialist is sometimes all that is necessary to prompt your debtors for payment. When these past-due accounts are quickly resolved, not only do you receive payment, but the customer relationship is preserved.
- Quickly recovering on overdue debts, you dramatically improve your DSO and decrease your write offs each year.
- Customers will receive a clear message that late payment and bad debts will not be tolerated. This will ultimately ensure that your company is at the top of the list of vendors to pay — month in, month out.
Potential Pitfalls of Recovering Debts on Your Own
By the same token, attempting to collect these accounts on your own is fraught with potential financial pitfalls.
Not only are you less likely to recover monies owed to you, but you could jeopardize fragile customer relationships. The only thing worse than a non-paying customer is no customer at all.
On the other hand, professional debt collectors are assertive and trained negotiators. They know how to handle your customers with tact and finesse.
They’ll educate and assist them in finding a solution to pay their outstanding debt to you.
In addition, unless you and your staff have been properly trained on compliance with the Fair Debt Collection Practices Act (FDCPA), you can subject your company to expensive lawsuits and significant fines. Federal rules and regulations are continually changing; they can be a minefield for the inexperienced.
Which is why reputable debt collection agencies are serious about compliance. They’ll continually review their processes and ensure that their collectors are highly trained in accordance with all state and federal regulations.
What Have You Got to Gain?
Most reputable agencies – like BARR Credit Services – work on a contingency basis. If they don’t collect, they don’t get paid. So you have nothing to lose (and a whole lot to gain) by engaging professionals to collect on your past-due accounts.
Your company’s financial health could depend on it.