The Bad Debt Issue
From time to time almost all business owners will be faced with the issue of bad debt. As a result, it is imperative that plans are put into place should bad debts arise so that the business is able to receive payment as quickly and efficiently as possible.
For some business owners, writing off bad debt is all part and parcel of running a business. While, to a limited degree, this is true, it is imperative that a business doesn’t just write off a debt without pushing the debtors for payment wherever possible.
A study that was performed by Leeds University showed that 30% of bad debts came about because of issues with cash-flow or that systems and procedures were holding up payment. Keeping that in mind, often a single letter from a debt collection agency that advises the customer that there is an outstanding balance is all that is required to secure payment.
Also, appointing a debt collection agency for the purpose of debt recovery does not necessarily mean the end of a business relationship – most customers will understand that all you really want is payment for the goods or services that you have provided.