Deciding to use a debt collection agency can be a big step for a business. Many business owners and other decision-makers have a number of questions they want answered before deciding to take that next step with an accounts receivable program.
They want to know that they made the best decision possible for their organization. Of course getting late and non-paying customers to the table is a top concern, there can be other concerns that a business of any size wants to address before taking the next step in debt collections.
Here are some common concerns a business may have regarding using a debt collection agency and how a reputable agency can assist in these areas.
Will we create negative relationships with existing customers?
Not many consumers really want to have a conversation with a debt collector. If they’re being contacted, that means there is either some financial strain, or a dispute. In some cases that first communication with a consumer can be awkward.
But a reputable collection agency with professionally trained collectors not only knows how to lower the temperature of a discussion, they also articulate the value in working out a resolution together. When two people decide to work together, progress is not that far off. It doesn’t matter if it is a dispute regarding the bill or the consumer is going through tough times financially. A professional debt collector will quickly inform that consumer that one of the purposes of this communication is to help them.
The more a collection agency helps your customers navigate their way out of a difficult situation, the stronger your relationship will be with that customer.
“Thank you for helping me get my life back together.” An actual quote from a consumer we recently spoke with.
Will it take too much time and resources to send a customer to collections?
It’s actually the opposite of what many decision makers think. A collection agency can save your organization a tremendous amount of resources including staff time and money.
Many business owners and others get frustrated by the internal resources they must allocate toward debt collections. While it’s important to work late accounts internally in the beginning, there comes the point when hiring a debt collection agency will be a smart move, both financially and to preserve your resources.
If you feel you are diverting resources that could be better utilized in other important areas of your business operations, it’s time to discuss how a debt collection agency can help.
Should we rethink extending credit to customers?
Many organizations start to rethink their processes for extending credit to customers. The business gets frustrated with their cash flow situation and constantly having to chase certain customers for payments. Some businesses think about not extending credit at all.
However, extending credit helps you build relationships with customers as well as forge trust. While most businesses will have a challenge with accounts receivables, in the end, it only ends up being a small percentage of your customers that do not pay on time.
By using a reputable debt collection agency, you can build a better system for extending credit to your customers.
Our business is concerned about the legal aspect of debt collections
This is where having a debt collection agency as an extension of your accounts receivable program can provide your organization with tremendous value.
Debt collection agencies must be licensed in the states and areas in which they do business. More than that, debt collectors must have a complete understanding of the legal parts of debt collections as well as the laws in both federal and individual state situations.
While most debt collection laws do provide oversight for debt collection agencies, you can provide your organization with an extra layer of protection by using a collection agency that is in full compliance.
Will our business recover enough money?
This is always a concern of a business of any size. Will the debt collection process be successful?
As they say, it’s better than doing nothing…
And if you follow the advice of your collection professionals, it will be a success.
Your recovery rate in debt collections will vary depending on several circumstances. Some of those variables include how long the debts have been outstanding, the accuracy of your record keeping, the number of debts disputed by your customers, and other factors.
A wise business decision is to seek out a collection agency that provides low-cost debt collections. The methods not only focus around diplomatic solutions, but they provide a business with enhanced Peace of Mind, knowing that their collections program can generate desired results.
We are concerned about our reputation in the community
It is mission-critical that you use a reputable collection agency. Asking the right questions before you make a decision is key to finding the right fit.
How will you treat my customers? That is one of the first questions a business should ask before taking the next step with a collection agency. The collection agency you are speaking with should you use words such as diplomacy, respect, dignity and tactful when discussing how they treat consumers.
Treating your customers with the respect and dignity they deserve goes a long way in preserving your reputation with existing customers and the communities you do business in.
And if you are concerned about your recovery rates and debt collections, as just discussed, the way your customers are treated can directly affect your recovery rates. It’s no coincidence there’s a connection between the two.
You can preserve your reputation and get the money you are owed.