If you have never used a debt collection agency before, you may be wondering what you stand to gain by doing so. Here are the five five best reasons to hire a debt collection agency.
1. Cash flow –
What better way to improve your cash flow than to recover money for the work you have already done? A recent study showed that collection agencies in the United States returned over $ 55 billion back to businesses. If you are a small business you are likely unable to use bad debt as a write off, so attempting to recover at least some of the money owed to you makes great sense.
2. Time –
Too many business owners or their staff spend far too much tme pursuing delinquent customers. Outsourcing their recovery to a third party will give them more time for sales and customer service.
3. No drama –
You or your staff may be reticent to approach customers who owe money. Confrontation is never easy, and not every one has the personality or the negotiating skills necessary for successful recovery of bad debt. I once worked with a dentist’s office in a small town that had over $30,000 in bad debt sitting on their books because the staff felt uncomfortable asking heir neighbors for money. Hiring a collection agency removed them from the process.
4. Specialized tools – A debt collection agency has specialized tools and training to find customers who have moved or changed their phone numbers. It is estimated that over half of customers placed for collection will need some sort of research, or “skiptracing” in the collection industry.
5. Focus – You as a business owner wear many hats. A debt collection agency has only one goal – to recover money for you.
Of coure, when you hire a debt collectiobn agency, you must make sure that you communicate your goals to them, and make certain they are a good fit for your business. Keeping in close contact with your collection agency and sharing any new information with them will help you get the best results. For example, if you find out that someone who is in collections recently got a new job, or if you hear that they have their house on the market, call your collection agency immediately, as this new information is very valuable to the collection process.
Like any other vendor, your debt collection agency should be a valued and trusted partner, with you for the long term. You deserve to be paid for your work, so let a collection agency help you get paid.