There’s a smart way to go about business, important when economic times are difficult and circumstances are sensitive.
As consumers and small businesses face a greatly increased risk of falling into debt, a much more targeted, strategic and smarter approach to debt recovery is required by companies which provide credit in any form. Having monies owed to your business will only go towards hindering your business potential.
There are 2 main options to resolving this situation. Either you can attempt to collect the money yourself, which often causes a large amount of stress, or you can pass the responsibility onto a commercial debt collections service.
Commercial debt collection services have the ability to collect anything from a single debt to providing full outsourced sales ledger management in your business name.
Debt collection services can provide a number of benefits:
· Outsourcing debt collection can save you time. Chasing payment of overdue invoices is an everyday reality in business today, and is nearly always time consuming and awkward.
· Debt collection companies are experts in handling debts in an appropriate way. Without the right negotiation skills to ensure successful outcomes, cash flow is often compromised and, subsequently, growth adversely affected.
· The process of recovering monies owed needs to be as painless as possible to avoid compromising client relationships: an important driver for many people who want to recover debt but still maintain valuable customer relationships. Using a debt collection companies can introduce a more impartial and objective third party into the debt collection process.
· Outsourcing debt collection can prove more cost effective. As well as saving you staff time, a good debt collection service will typically provide a ‘no success, no fee’ basis.
For help in finding a reputable and reliable company when choosing a debt collection service, you should look out for membership of the ‘Credit Services Association’ and the ‘Debt Buyers and Sellers Group.’
If you do choose to go it alone, we all know that businesses survive on cash flow. Therefore it is important to keep on top of your sales ledger.
The most important thing when dealing with late paying customers is to maintain credibility by following through with your threats. So if you send a letter advising that if their invoice isn't paid within 7 days the account will be passed to a debt recovery agency it is important that you do this once the 7 days have expired, and you don't recontact the customer or send another letter.
This way you maintain credibility and the customer believes that you will enforce your credit terms increasing the chances of a satisfactory outcome.
Written by Oriel, a leading provider of debt collection services. We provide a wide range of collections services, including Commercial collections, Consumer collections, Niche collections such as factoring, insolvency, probate, and Consumer debt purchase. For more information about our collection services call us now on 0845 226 1816 or visit http://www.orielgroup.co.uk/Collections/.
