The Benefits of Instructing a Commercial Debt Collection Agency
The Benefits of Instructing a Commercial Debt Collection Agency
People in businesses across the UK deal with the issue of non-paying clients every day.
It is almost a routine subject for business owners and credit-control teams alike, as every company will have a bank of ‘bad payers’.
There are many reasons for this.
For example, your business might have rendered services to a customer who later has decided not to pay.
You may have a client who has disputed an invoice.
There might be one in another country who is trying their luck and counting on you not pursuing the debt due to the distance between you.
In any case, the subjects of debt and credit control are some of the most important in the running of a business in the 21st century.
Most businesses will have some type of credit-control system in place.
Sales and accounts teams will be taking prudent measures to ensure that you receive payment as expected.
Whilst a procedure like this exists, many clients will still try to find ways of getting away with not paying.
When you have exhausted all normal methods of credit control, what is the appropriate next step?
How do you recover a debt owed to your business if you have done all the normal steps you take?
The answer is to instruct a professional debt collection agency.
What are the reasons for this?
In this article, our team of expert debt collection agents have listed the most beneficial points of instructing an agency.
The Benefits of Instructing a Commercial Debt Collection Agency Compared to Other Methods
When faced with the issue of an unpaid invoice, you must act.
Leaving the debt idle will only harm the company, and also set a precedence for similar events to happen in the future.
It is important to understand the best and most appropriate way to recover your debt, and what options are available to you.
As mentioned, most businesses have a credit-control process in place.
This is an excellent measure to take, and whilst this is effective there are always a few bad payers with who you cannot reason.
At this point, it is not cost-effective to continue the recovery process in-house.
Have already spent time and money through the normal credit control process but have not achieved success?
If this is the case, it is better to escalate the matter to a commercial debt collection agency.
It is important to set a form of ‘cut off point’ if you already have a credit control process.
If a debtor ignores your methods, you should not waste any more time or money on them.
Hiring the services of debt collection solicitors is also an option, but this is a very expensive and time-consuming process.
Whilst court action can be effective, the cost of the solicitors can outweigh the value of the debt.
As well as this, there is no real guarantee that the action will be able to recover your money, with many cases ending with a CCJ being written.
Whilst this is a good outcome, it still means that you will need to spend even more time and money to enforce the CCJ.
The benefits of a commercial debt collection agency outweigh that of other options.
You should do proper research into finding the best debt collection agency for your own requirements.
Instructing one is by far the best course of action.
What are the Benefits of Instructing a Commercial Debt Collection Agency?
Instructing the services of a professional commercial debt collection agency is the best way you can recover your money.
The Highest Debt Recovery Rates
One of the most important factors for and debt collection action is its effectiveness.
You should compare a debt collection agency to other methods of collection.
By doing so, you will immediately see that the recovery rates are superior.
Federal Management, for instance, has an average debt collection rate of 90% on all undisputed business claims.
This recovery rate demonstrates the benefits of instructing a commercial debt collection agency.
Specialists in All Industries
Having a professional agency with an understanding and expertise in your industry is better.
The commercial debt collection agency you instruct should be able to immediately pick up your debt.
This is instead of having to familiarise themselves with the details of your sector.
Federal Management are experts in every working sector in the UK.
Since 2004, we have dealt with cases in all industries.
This means our debt collection experts already understand what the best course of action is.
Collect Debt from Anywhere
Are you are collecting the debt yourself or hiring a debt collection solicitor?
If so, you may have issues when attempting to collect a debt from someone in another country.
Factors such as the language barrier, local business hours and a lack of understanding of another country’s debt collection laws can make recovering a debt difficult.
Federal Management is the UK’s leading international commercial debt collection agency.
Our global network of international collections agents each has an intimate knowledge of their own country’s debt recovery laws and practices.
As such, we can recover commercial debt from anywhere in the world.
Low Commission Rates
A key benefit of instructing a commercial debt collection agency is the cost.
Compared to expensive solicitors or the cost of collecting the debt alone, agencies operate on a much lower price point.
For instance, Federal Management has the UK’s lowest commission rates for any debt collection agency, beginning at 6%.
As well as this, our professionalism and service levels are unaffected by this low cost.
This helps our clients receive the best service for a nominal fee.
Greatest Chance To Recover a Debt – Free Pre-Action Assessment
One benefit of instructing a commercial debt collection agency is that you have the best chance to recover your funds.
Federal Management provides a completely free pre-action assessment of your debt.
During this service, a debt collection agent will examine the chances of a successful recovery.
If we can recover the debt, then it is very likely that it can be.
If there is a low likelihood that recovery can be successful, we will let you know the potential outcomes.
This is crucial information for those looking to recover money.
If you know that we can recover the debt, you will save a lot of time and money.
Accredited and Regulated
Another key benefit of instructing a commercial debt collection is their accreditations and regulators.
It is important to only look to instruct an agency that has a regulating service.
Those that don’t may use tactics that lead to more problems later on in the process.
Federal Management is regulated by the Financial Conduct Authority (FCA).
We are also members of the UK Debt Collection Bureau and are accredited by the Credit Services Association (CSA).
This means that our clients can have peace of mind that we handle all collections in the most professional manner possible.
The Benefits of Instructing a Commercial Debt Collection Agency – Federal Management
Federal Management is the UK’s leading commercial debt collection agency.
As well as the benefits mentioned in this article, there are many more which set us apart from the competition.
For more information on how we can help you and your business, speak to one of our friendly debt collection experts today.