One of the most common problems many business owners face is collecting debt. At some point, you’ll encounter clients who don’t pay on time and this can be detrimental to your business. Unpaid invoices can disrupt your cash flow, hinder the growth of your business, and drain your resources like your time, money, and energy. Hoping that the debtors will eventually settle their accounts is not a good idea for your business. Their debts might be accumulating and before you know it, the client will file for bankruptcy and leave you with nothing to collect.
It can be quite a hassle to constantly chase late payments. If you’ve done everything in your power to collect debt but still end up being unsuccessful, then maybe it’s time to turn to the services of a debt collection agency. Perhaps you’ve thought about hiring a debt collector, but something inside you is preventing you to take action. We found out the reasons why most people are hesitant to hire a debt collector, and why you should hire one so you can settle your unpaid invoices immediately.
5 reasons preventing you from hiring a debt collector
1. You think that the debt is too small.
The first reason why most business owners fail to hire a debt collector is because they believe their debt is too small for debt collection agencies to handle. This is false because any debt that has a significant impact on your cash flow means that it’s an important resource that needs to be collected immediately. To help save your time and energy, outsourcing this issue to a debt collector will give you peace of mind and help you avoid unnecessary expenditures that might cost more than the actual debt itself.
Most debt collection agencies don’t count the amount of debt you have because it’s their responsibility to collect it for you. They know full well that if they can satisfy your needs as a customer, there’s a chance that you may return to them if you have bigger debts to collect in the future. Debt collection is part of a business-related partnership and no debt is too small for debt collection agencies to handle.
2. Debt collection agencies are expensive.
Debt collecting is much more of an investment than an actual expense. Unpaid invoices are no use to you until you finally see it reflect in your account. If you’re wondering whether it’s worth hiring a debt collector, think about how much you are willing to invest to settle late payments. Professional debt collection agencies don’t charge hidden fees and may even provide you with a free debt assessment before handling the debt itself.
They don’t charge a fixed rate for their services and operate on a commission-only approach. This means that they’ll only receive a percentage of the debt collected as payment. Debt collectors also provide you with no collection, no commission guarantee, meaning that you won’t have to pay upfront before your debt is collected. This ensures a positive ROI on your part which is one of the reasons why you should strongly consider hiring a debt collector if you have unsettled accounts to chase.
3. It’s time consuming to deal with debt collectors.
For many business owners, time is of the essence. It’s one of the most important resources for nurturing the growth of any business and you can’t afford to waste any time chasing late payments. Most people believe that dealing with debt collectors can take up too much of their time which is the exact opposite. Professional debt collection agencies have years of experience collecting unpaid invoices and they can actually speed up the process of obtaining debt from your clients. A dedicated account manager will be you and your debtor’s point of communication which streamlines the process and makes it easier for both parties.
This avoids any sort of confusion and guarantees a personal approach when collecting debt. Letting your debt collector handle unsettled accounts can free up your time immensely and double your productivity. This way, you can focus on growing your business without having to constantly chase bad clients.
4. Debt collectors are aggressive when dealing with clients.
Perhaps you’ve heard some stories of debt collectors aggressively chasing debtors, leaving you worried that hiring a debt collector will scare away your clients. This comes from unprofessional debt collectors that have below average standards when dealing with clients. Concerns like this are understandable which is why you should always do your research on a debt collection agency before acquiring their services.
A professional debt collector knows how to be assertive and proactive when it comes to collecting debt from your clients. Effective communication techniques are based around a sensible debt collecting approach which helps increase recovery rates and maintains the relationship you forged with your customer.
5. You think you don’t need a debt collector.
Many business owners prefer to take matters into their own hands and handle the debt collecting by themselves. The problem is that it can be difficult to see tangible results due to consistently broken payment promises. This extends the debt collecting process and leaves you feeling frustrated as a result. Debt collection agencies know the ins and outs of collecting unpaid invoices, especially the legal side of things.
A debt collection agency provides legal protection to your company by complying with debt collecting laws. Infringement of these laws may result in hefty fines, or in worst cases, strip you of your right to collect debt. To avoid conflict with these laws, it’s best to leave the process up to the professionals to handle your unpaid invoices.
Acquiring the services of a debt collection agency will go a long way in ensuring successful debt recovery from your clients. By streamlining the debt collection process, you can preserve your valuable resources while avoiding friction with your clients. This helps reduce costs as well as maintaining the relationship with your clients which are essential for growing your business.