To operate a successful business it is crucial to maintain a positive cash flow and trying to recover debts from a client is sometimes not easy. Once a client is past due date with his payment, debt collection can be processed in-house or outsourced to a third party. Hiring a collection agency is not uncommon for companies as sometimes the debtor tries everything to avoid paying the receivables and securing payment can be stressful, time-consuming and inefficient if the business financial department lacks experience and the right tools to secure debt within the shortest time period possible.
More and more Australian businesses are now outsourcing debt collection to take the burden of debt collection off their shoulders and protect their company against growing debt and bankruptcy. Read on to find out the number of reasons why its best to involve a third party when it comes to debt collection and how the business will benefit from outsourcing this task.
A professional debt collector will save the business time by taking a proactive approach and call the debtor immediately on the same day of hiring to secure payment. The expert is trained to create a collection plan and be as stubborn as it needs to retrieve the debt owed, hence there will be emails and letters following the calls. An agency has the time to pursue debt with a flexible approach and work with the creditor in the best manner possible.
As debt collectors have the necessary skills and expertise to perform legal debt collection activities they are specialists in their field and will be more likely to get money back in an efficient manner. If a phone call and a letter are not enough to recover the outstanding payment they will have tools to deal with debtors as well as resources available to issue legal proceedings against him.
There is the assumption that hiring a debt collector is a costly matter. But the truth is, that the business will start losing even more money once the in-house collection team is ineffective or extra staff needs to be employed that has experience but costs an extra salary. A professional debt collection agency will try to retrieve debt in the shortest time possible to save the company time and money.
No staff training
Trying to retrieve debt using internal resources can be very stressful for employees, which might affect their productivity and overall performance in the business. Reminding debtors of their due date is not an enjoyable task and some staff might need training to become comfortable in making such correspondence as well as to learn legal recovery techniques. Hiring a debt collection agency will not only cut back the need for internal staff but let a neutral and rational expert handle the collection process.
Engaging a debt collector will optimise the business productivity as no employer needs to take time away from the company and all staff can focus on internal tasks and concentrate on their main position. Without wasting valuable human resources on the difficult task of debt collection, hiring a debt collector will increase the business sales and keep the company successful.
A collection agency will quickly understand the business and gather all information it needs to recover the debt in the shortest time possible. The experts are in the know of different approaches, which will influence the success in securing payment. Sometimes their resolution is actually to engage the debtor and not confront them to reap positive results and maintain the business relationship for the better.
Receiving a call from a debt collector will make the debtor uncomfortable as it makes him realize the creditor is serious about payment terms and conditions and they are more likely to pay. With an agency involved, debt is usually recovered without the need for legal proceedings as a letter from a debt collector often puts enough pressure on the debtor to uphold their agreement.
Maintain client relationship
By outsourcing debt collection the business is able to improve its customer service and communication as collection agencies have negotiation skills that are vital for the business, being careful as to maintain a healthy relationship between the client and the debtor. The debt collector will take over all communication between the business and customer and treat the debtor with professionalism but will always act in the business best interest to ensure a positive response from the customer.