Bad debt can be crippling for a lot of businesses in today’s market. Chasing debts can be difficult and sometimes an impossible job for any credit department. And taking a proactive credit management approach will see you avoid many problems associated with late payment, but not all.
Unfortunately, it’s inevitable that you run into a client that’s facing bankruptcy or simply refuses to pay an invoice due a dispute or cash flow problems. In these situations, it’s necessary to identify these troubled accounts quickly and to escalate them to a debt collection professional sooner, rather than later.
We know, we hear it all of the time…”I’m afraid to outsource my potential bad debt because I don’t want to lose control over my customers.”
Don’t be. When partnering with a good collection agency/law firm you don’t lose control. In fact you will,
- strengthen your existing credit department;
- save time, money and resources;
- uphold your positive reputation and maintain your business relationships;
- improve your cash flow and reduce your DSO reduce and bad debt write-offs.
STRENGTHEN YOUR EXISTING CREDIT DEPARTMENT
Engaging a debt collection professional shows your customers that you are serious about debt with little intention of writing it off. Therefore, your customers will be less inclined to test the boundaries and make sure you are paid on time when they know there are negative consequences in the first place.
And by introducing a third party into the collection process, it will make those clients who are ignoring your attempts at collection, sit up and listen. A competent debt collection professional apply a lot more continuous pressure to your clients to retrieve your debt because getting you paid is their sole job.
SAVE TIME, MONEY AND RESOURCES
Not only are invoices that remain unpaid at 90 days cash that could prove a major difference to your cash flow, its recovery will no doubt be consuming a great amount of your time and resource, which in turn detracts from your newer debts.
Simply put, it’s wiser for you to spend your time and effort into growing your business rather than chasing a customer who won’t pay their bill. The same goes for your credit department, outsourcing delinquent debt allows them to concentrate on increasing the collection calls to your more recent receivables. The more contact you have with your clients the earlier they will pay and therefore, reduce the amount of debts you refer onto your debt collection agency in the first place.
UPHOLD YOUR POSITIVE REPUTATION AND MAINTAIN YOUR BUSINESS RELATIONSHIPS
Your customer relationships are the future of your business and the last thing you want is for your reputation and relationships to suffer as a result of bad debt. It’s all too easy to take someone owing you money personally and to say something you regret in the heat of the moment.
By distancing yourself from the collection process, you are able to maintain your relationship with the client and do business in the future (obviously it would be a good idea to renegotiate your terms or ask for payment upfront rather than extending credit again to a client you had to chase for payment).
Collection agencies are also up to date with compliance and legal issues associated with debt collection, meaning you avoid any potential conflicts.
IMPROVE YOUR CASH FLOW AND REDUCE YOUR DSO REDUCE AND BAD DEBT WRITE-OFFS
With debts outstanding you may struggle to pay your own creditors or purchase needed supplies. Considering The U.S. Department of Commerce concluded that unresolved account receivables lose 10% of their value every month after 90 days, the longer you hold onto your aging debt, the less it’s worth.
Debt collection professionals are the experts and they have resources that get you paid that you don’t. They will conduct skip tracing and utilize private investigators. They possess collection techniques and technologies to assist them recover your money.
Please visit Dynamic Legal Recovery’s website or call us at 877-777-7564 for your complimentary evaluation.