The Best Debt Collection For Small Business
The Best Debt Collection For Small Business
If you are a small business owner, you know how important customers are to your success.
By making prompt payments on the goods and services supplied, customers help give your company the resources vital to growth.
A company that is able to maintain a healthy and steady cash flow will prolong the life of the business.
Unfortunately, there will probably come a time when a customer leaves you with unpaid invoices, and you will be forced to seek payment by any means necessary.
Many businesses across the UK will, unfortunately, experience a situation such as this at least once.
There are ways in which this can be negated before it gets to the point of needing debt collection services.
Knowing how to handle a situation like this is crucial to getting your money back successfully.
For example, an organisations credit control team should operate mandatory payment terms before any services are carried out.
This means that the client will know when they have to pay, which is usually 30 days after goods have been provided.
One such way to receive overdue payments is through using a business debt collection agency.
A debt collection agency is basically any company hired by a business to collect money that is owed.
These companies should be employed as a last resort, but they can be very helpful if needed to collect your bad debt.
One major benefit to employing a debt recovery agency is time; more specifically the recovery of time crucial to operating your business.
If you are busy writing letters and making phone calls to a customer who owes you money, you are certainly losing productivity.
Debt collection agencies have the people available to handle all aspects of getting your money, so you can return your focus where it belongs – on your business.
Those that offer debt collection for small business services will also send a message to the customer that they are serious about recovering the funds.
When faced with the prospect of a constant barrage of phone calls at home and work, most people elect to pay off the debt.
In addition, the threat of having their credit score negatively affected usually yields payment.
But despite these negative consequences, there are still people who refuse to pay.
The Debt Collection Process for Small Business
It is understandable to be unsure of the process if you have never collected debts before.
Depending on the size of the outstanding debt, and if there is still no sign that a customer intends to pay, you do have the option of going to a county court.
A debt collection agency will be able to handle the legal proceedings, which can be a huge advantage.
However, it is important to consider all sides of the case before deciding to proceed.
The court will likely be a costly proposition, and unless the debt is large enough to warrant legal action, it may be best just to bite the bullet and take the loss.
One final benefit of employing a debt collection agency is the fact that these companies only get paid if they can recover the debt.
This makes debt collection for small business a low-risk option in your attempt to recover back payments.
If they are unable to get the customer to pay, you have at least saved the time that would otherwise have been lost.
And if they are able to secure the payment, you will only have to pay them between 4% and 10% of the debt. This creates a win/win situation for both you and your business.
A debt collection agency may use many different tactics in order to secure a successful payment.
In most cases, a debtor will end up paying the full amount in one payment.
Other times, payment plans may need to be set up in order to secure full payment.
Payment plans are essentially standing orders for debts, which means the debtor won’t have to pay at once but will ensure you will get your money back eventually.
For a small business owner, the benefits of employing a debt collection agency are undeniable.
When you use a debt collection agency, you will also negate jeopardising the relationship with your client.
This is due to the professional and calm manner in which they will communicate with the client.
In a perfect world, your business will avoid ever needing to use such a company but it’s nice to know that a debt collection agency is standing ready, just in case.