Collection agencies in the United States recovered over $55 billion in 2013, according to a recent study. That number has only grown. Medical, credit card, mortgage and student loans dominate the types of delinquent debts placed for collection. Small business owners certainly benefit from the credit and collection industry as well.

When small business owners do not get paid, the impact can be immediate. Small business owners  are often the first ones to forego their salary to plug a hole in their cash flow stream. If delinquencies continue, or increase, one or more of the following could happen:

• No new hires leading to existing staff being overburdened. The result is a hit to morale and decrease in productivity.
• New marketing programs or development of new lines of business are curtailed.
• New equipment orders are delayed or cancelled. Maintenance on existing equipment could suffer as well.
• Credit lines are contracted, possibly making your product less competitive
• Less money to pay creditors, leading to a hit to business credit availability and reputation.

A recent  found that if  paid on time, U.S. small business owners could hire an additional 2.1 million employees.  This alone would reduce unemployment to around 3% – a 23% decrease. How is that for a jobs program?

It does not take long for uncollected receivables to choke the cash flow of a small business. All too often, collection agencies are brought only when a business is in trouble, or after the debt has grown very stale. Several times, I have had to tell a small business owner that they money they were carrying on their books for years has now gone past the legal statute of limitations, making it basically noncollectable. By the way, the statute of limitations in many states is at least 5 to 6 years. What purpose could a small business have for holding onto bad debt that long?

Hiring a collection agency can not only improve cash flow but give a small business the opportunity to expand and grow. Collection agencies focus on getting you paid, and let you go back for managing your business.