Debt collection takes time and a lot of effort. And as a business owner, we’re going to guess that you’re pretty short on time.
So, when you have outstanding payments that you need to collect from delinquent customers, it might be worth hiring a debt collector to take on this challenge.
Why? Well, it’s important that you can spend time on being able to keep your business running, by providing your services, making your goods, rather than having to spend extra time on chasing up money that should have well and truly been paid already.
Today, we’re going to talk about debt collectors and why you should consider hiring one if you find yourself at a dead end when trying to collect the outstanding payments. But first, let’s talk about why you have these outstanding payments from customers happening in the first place.
Why do you have accumulated debt in the first place?
This is a question that begs to be answered, and here are common reasons why small businesses suffer losses due to debt:
You don’t have a proper debt collection process in place
While the main goal of any business is to gain profit and market themselves out there for the world to notice, you might have been shortchanging yourself and allowed clients to place orders without having much thought on how and when you would be collecting account receivables. This is quite a common mistake and thankfully it can be remedied as soon as possible.
First have a look at your collecting process and see if you can answer the following questions with a yes or no:
- Do you give out invoices as soon as an order is placed?
- Do you give reminders to clients in a timely manner?
- Do you email and/or call clients to follow up on their payment?
- Do you have a terms and conditions contract in place?
- Do you have an employee who organises and takes note of account receivables?
If you answered “no” to any of these questions, you might want to take a step back and review your debt collection/account receivables process.
If you can get a well-oiled process in place, you might be able to avoid working with us in the future.
You don’t have a terms and conditions contract
Any business deal should be finalised on paper. No matter how small or big the transaction is, it will be beneficial to both parties that a contract is put in place.
A terms and conditions contract is a legally binding agreement between a business owner and the client. It details the transaction and also what is expected of the company and the client.
It will also include:
- When the order will be delivered to the client or what type of service will be offered
- When the client should pay
- How the payment will be made
- Any late fees
- What the company intends to do if the client fails to hold their end of the contract.
As this is a legally binding contract, both you and the client have a reference point if someone fails to uphold their end of the deal. It also means that everyone knows where to find the relevant information for the business relationship, and if things do get more serious, you have a legally binding document that can back you up.
You might have made making payment an inconvenience to clients
Making small changes such as accepting payments via online money transfer services can help improve your debt collection process.
While once upon a time cash deals were king, these days it’s just not that convenient. And it’s in your best interest to provide options for your clients so they really don’t have a reason to not pay you.
Debt Collectors for Hire
Hiring a professional debt collector to do the collecting for you might seem intimidating. After all, you might have thought that getting one might cost you a pretty penny.
Good news – a reputable debt collection company usually doesn’t charge their clients UNLESS the collection is successful. There are usually no payments made upfront so there’s no need to worry about spending.
If you have customers who have not paid their bills, then you’re having to spend additional time on chasing these up. While you still need to pay for the services of a debt collector if they successfully recover the payments (and more often than not, they do), it’s important to remember that time does equate to money too. So, you could spend a little bit of money to get professional help and likely recover the money or you could spend your own time, and potentially not have the same level of success.
Hiring a debt collector can make a world of difference in managing your business and cash flow. You can only do so much as a business owner and debt collectors have an arsenal of tools and techniques to encourage clients to pay their debt. Here are some of the reasons working with a debt collector might be the best option for your business.
They can do a comprehensive check on people’s credit history
Professional debt collectors can look into anyone’s credit history with a simple click of a button.
Your credit history details things such as loans and how often you pay. This gives the debt collection company an idea of what your spending habits are, and if you’re the type of person that tends to miss deadlines.
This can help two-fold. It can be useful for the debt collector when chasing up the outstanding payments from your debtor, they can use this information to work out potential payment plans. But it can also be useful in that you can get this information before you actually sign the deal to work with a potential client too.
They can negotiate
A debt collector’s negotiation skills are nothing short of amazing, and they can convince people to pay their debt in a timely fashion. This showcases how good they must be in communicating and they are sympathetic towards people with debt, while still keeping in mind that their goal is to collect payment for your company.
Here at JMA Credit Control, we have more than 50 years of debt collection experience in our team and over this time we’ve seen a wide variety of businesses, industries and reasons for the debt, and we can use this vast experience to find the most effective way to get someone to pay their outstanding debts.
Basically, they can do things that you can’t
As a business owner, you have your hands tied with all sorts of things within your company. You have sales, marketing, people management, product or service launching, and the list goes on. The decrease in accumulating client debt is one way you can improve your cash flow by implementing a process that is applicable to your business and one that will encourage clients to keep coming back.
Debt collection is our focus, because without a successful recovery, we don’t get paid for our services, so we can make that debt recovery our total focus and you can focus on your business.
Running a Business is Tough but it doesn’t have to be
Being your own boss has its ups and downs, with moments of gratification and frustration scattered here and there. However, you don’t have to shoulder all the burden – hiring a professional debt collection agency can make things easier on your end as you have one less thing to worry about.
With JMA Credit Control, you have the freedom to focus on things that matter while we get to the nitty gritty of debt collection. We don’t ask for upfront payment; you only get to pay for our services once we have successfully collected debt. With decades of experience under our belt, we’ve helped entrepreneurs with their financial problems throughout the years. Contact us today and learn more about how client debt can be a thing of the past with JMA Credit Control.