Are you looking for a debt collection agency?
In Australia more than 60% of small business within the first three years of operating will unfortunately close its doors.
With the never-ending challenges business owners face daily the most common fact in business closure is ‘cash flow’.
Cash flow is essential to not only survival but also your ability to grow and prosper, without a solid cash flow position you are not able to meet your obligations and keep your business operating.
Whilst there are various reasons why business is impacted by cash flow one of the most paramount key functions of any business is invoicing and credit control, it is imperial businesses make sure they limit slow payers and bad debts with the appropriate processes and procedures.
Timely payments from debtors facilitates a healthy cash flow position as this essentially dictates the longevity of your business.
While you may employ a bookkeeper or have a dedicated accounts department who manage your invoicing and receivables, there is an overlooked function that could potentially save your business money and time, and that is to partner with a professional debt collection agency as an extension of your existing team, allowing you to focus on your business and not worry about chasing payments form customers.
As more and more business waste valuable resource chasing debts below are 7 reasons using a debt collection agency is the best business investment you can make.
One’s Time is a Valuable Commodity
Lefts face it operating your business is your focus in order to drive growth, you don’t want to be wasting your time chasing payments.
Engaging debt collectors to recover the outstanding money is their business, their sole focus is chasing debts in order to achieve the common objective – to get your debtors to pay as fast as possible.
Professional debt collection agencies are expert negotiators, tactful, persistent and even have an understanding of human psychology, they also have access to industry leading technology that can speed up the process of payment.
Most importantly as a debt collection agency they have they up to date knowledge of legislation regarding jurisdiction and procedures.
Influential Debt Collection Agency
When debtors are met with an official debt notification from debt collection agency, it has more impact than a call or email from you or your accounts team and more often than not invokes action.
Receiving contact from a third party has a psychological element involved and indicates to the debtor you are taking the matter seriously.
Knowing the debt collection agency will have processes in place to keep following up until the debt has been paid, the debtor knows they can not ignore the demand for payment forever.
Efficiency of a Debt Collection Agency
While the idea of an extra cost to your business may make you hesitate to use a debt collection agency, in most cases it works out to be more economical than to incurring the expensive set up costs for your own internal collection system.
There will be occasions when even with the many attempts from your accounts team a debtor will simply not pay.
When this situation occurs, you will at some point need to initiate collection proceedings so having an already established partner within your business means you not only mitigate these issues arising in the first instance but also you have someone at the ready to deal it promptly.
Having a debt collection agency can work in your favour as they can sensitively deal with the issue of non-payment, which will allow them, if there is a genuine reason they haven’t paid, to save face and continuing to use your services once the debt is settled.
Serious Payment Terms and Processes
Using a debt collection agency send a clear message to debtors doing business with you that you take accounts receivable seriously.
It indicates to your customers that you expect the trade terms set up to be abided by and expectations that you will in return do the same.
Stronger Business Relationships
Separating accounts receivable enables you and your employees to maintain strong relationships with your customers and a professional agency will conduct themselves in such a way as to retain all the goodwill between your business and its customers that you have work so hard to achieve.
Efficient and Effective
All the points mentioned above mean for you as a business owner have a quicker resolution, freeing up you and your employees to do what they are employed to do instead of chasing money owed.
The most significant benefit partnering with a debt collection agency is a stronger cash flow due to quicker resolutions.
Many businesses today are engaging the professional services of a debt collection agency as a way to reduce bad debt, and remember if you are tempted to write off debts that remain unpaid a debt collection agency can help to mitigate the need to do this, and recovery the debt promptly.