Competence is an important factor that makes a successful business different from the rest. And one way of keeping a strong foothold of your business is by effectively managing your cash flow. There are many things that can impact business cash flow, and one of the biggest influences is having a significant volume of overdue accounts.
Failure of managing or monitoring your delinquent accounts can severely impact the growth of your business, especially if you are just starting out. As a business owner/operator there is a multitude of tasks that need completing which usually results in your receivables being left unattended. Fortunately, small business owners like you have a quick option to utilize, and that is to engage the services of a professional debt collection agency. If you are time poor or not comfortable chasing your overdue accounts, then having someone do it for you will not only save you time to focus on other key business deliverables but can also improve your cash-flow to grow your business.
There are many good reasons why small businesses need a collection agency. Here are a few:
To avoid wasting valuable resources
Most small businesses today tend to possess a limited amount of resources, which includes the hiring of administration staff. Each business owner/employee usually has multiple processes to complete in addition to their standard set of daily, weekly or monthly tasks. If you have someone spending most of their time chasing overdue debtors, other important tasks may fall over impacting other areas of your business. Your business should primarily focus on growth and making profits, and a team of professional debt collectors can help you achieve that goal by referring uncooperative debtors to a professional.
You never know what financial trouble your client may be in
By not effectively managing your receivables or contacting your debtors early in the collection process can leave your small business exposed to bad debts. Generally speaking, the earlier your business refers a past due account, the better the chances the debt collection agency will successfully collect the payment in full. Typically, most small business owners wait 60 days or longer. Some may even wait until the past due account is over a year old! The problem with this is that your customer may now be in severe financial hardship or possibility trading while insolvent. If this is the case, then there is a very real chance that you will get nothing in return and this overdue debt will become a bad debt. Engaging a debt collector at the first sign of financial distress will give your business the best chance of recovering an overdue amount. Since debt collection agencies have built-in expertise in debt recovery and are also well-versed in the legal side of the challenge, they tend to help small businesses like yours recover debts faster, by placing your small business at the top of the payments list.
Debt Collection Agencies get quick results and add a sense of urgency
For most people, getting a collection letter or phone call is a huge wake-up call. Additionally, hearing from a reputable collection firm also demonstrates that you are serious about recovering the balance. Bottom line, it’s a powerful motivator, and as a result, debts get paid faster once a debt agency becomes involved.
Can save your business a lot of time and effort
Time is very important for any type of business. It is highly unlikely that a small business won’t make any noticeable progress for a long period of time if they have to spend significant time chasing up and trying to track down overdue debtors. When a customer severs all contact with you — disconnected phone, no forwarding address — collection agencies have resources to help track them down. Good debt collection agencies have access to credit reporting tools, public records databases, and more to search for lost customers and find updated contact information. An agency that specializes in locating debtors can save your business many hours trying to search internally and allows them to use their skills in finding the owners of those skip accounts.
It decreases the amount of your bad debts each year
Hiring a debt collection agency for an extended period of time has many benefits as well. The more years you have a debt collection agency on your books the more your small business will see a reduction in bad debts. Fewer bad debts is a strong sign that your business is in good health. It can also give the impression amongst your clients that you are a respectable business that doesn’t tolerate late payments or evasive clients.
Brodie Collection Services is a full-service agency offering a multitude of services and is one of Australia’s leading debt collection firms. Our objective is to provide you with expert debt recovery and advice at a price lower than market cost. Our recovery approach is simple – we strive to get to the bottom of why you’re not being paid, then implement steps to ensure prompt payment. With 25+ years’ experience in debt recovery, we have undeniable results proving that debtors will pay once we become involved.
With offices in Melbourne, Adelaide, and Brisbane, we can assist will all your collection & recovery, legal support services, and credit risk management requirements.