You have a growing small business, are “doing everything right”. You use customer contracts and have a good plan to recover bad debt in-house. When do you need to hire a collection agency?
Here are 8 signs it is time to get some outside help:
- You have a growing number of receivables over 90 days past due.
- You are spending too much time chasing non-paying customers and you do not have enough time for sales and customer service.
- You are having trouble paying your creditors because you are owed so much money.
- You do not have the cash flow to hire new employees or buy new equipment.
- Customers you have been billing move and you have no way to find a new address or contact information for them.
- You and your staff do not wish to be involved with customer disputes over payment.
- You have been going to small claims court and getting judgments, but are still not getting paid.
- Your accountant tells you that you cannot get a tax benefit from writing off your bad debt.
When small business owners to not get paid, it hits the community and people in the community immediately. Small business owners usually pay themselves last, and if they do not have the cash flow, they work for nothing. Heck – even President Trump has been accused of non-payment to small businesses.
Hiring a collection agency can save you time and put cash back into your business.
Debt collection agencies have resources to research and find people and their assets. They are expert negotiators who know how to handle disputes. They can set up effective payment plans and make sure people pay when they say they will. If you have obtained court judgments that you cannot collect, a collection agency knows how to attach assets, and execute court judgments using liens.
Hiring a debt collection agency may be the best business decision you make this year!