Every business owner will agree that trying to collect debts from slow patrons and on past-due accounts is a major challenge and can result in serious negative repercussions on success. In fact, the results of a study conducted by the U.S. Bank found that cash flow problems result in more than 80 percent of business failures. Despite sending payment reminders, you’re bound to encounter debtors who just won’t respond to your collection attempts.
Fortunately, you don’t have to give up hope and just accept the financial loss, because there’s a way that you can successfully collect your overdue debts. How? By hiring a debt collector. Here’s a look at just some of the reasons why you should seriously consider hiring a debt collection agency.
No matter how many payment reminder letters you send and phone calls you make, business owners who attempt to collect on past-due accounts often fail. Having a third-party debt collection agency, however, can be much more impactful. While customers may be more apt to toss payment reminder letters and ignore debt collection phone calls, when a third-party agency reaches, debtors are more apt to pay their bills.
A lot of business owners are under the impression that hiring a debt collection agency is an unnecessary expense. While you do have to pay a fee, when you calculate the amount of money that a third-party agency can collect, you’ll collect the money that you’re owed, which will likely amount to a lot more than the amount you’ll spend on a debt collector. When you compare how much you’ll spend to hire a debt collection agency to how much of the money you’re owed they will be able to collect for you, you’ll see a big return on investment.
Typing up letters and getting them out in the mail, making phone calls, and following up on all of your debt collection efforts can take a tremendous amount of time. As a business owner, your time is precious. When you hire a third-party debt collector, they’ll take on the task of contacting debtors for you, freeing up your time so that you can focus on more important things – like running your business.
Debt collection is a highly regulated industry and you need to adhere to legal guidelines. While you’re an expert in your line of business, you probably don’t know much about debt collection and the laws that surround it. A debt collection agency, on the other hand, does know the laws that govern collecting past-due payments, such as what to say to your debtors and how to say it – legally.
Summing It Up: Hiring a Debt Collection Agency is a Worthwhile Investment
Given the above-mentioned benefits, it’s easy to see why hiring a third-party debt collection agency is a worthwhile investment. If you are a business owner and clients’ past due bills are piling up, you can get paid the money that’s owed to you and reduce the risk of losing your livelihood by hiring a professional debt collection agency.