Common questions we hear small business owners ask about hiring a collection agency

If you’re considering using a collection agency for your small business, you probably have many questions. You probably also have concerns about moving forward and that’s understandable.

Many small business operators and owners reach a point of frustration with cash flow.

But hiring a collection agency can be a critical and necessary step for a small business with negative cash flow.

Here are some of the more common questions about small business and debt collections we hear.

What if a collection agency damages my relationships with customers?

Many people think that the only role a collection agency serves is to collect money from consumers. But that’s only part of an agency’s responsibilities.

Small businesses fear losing existing and future business if a collection agency doesn’t treat their customers fairly. And that’s understandable. Small businesses work hard to secure and maintain customer relationships. Collecting money is important, but preserving relationships is critical.

There’s been an age-old misconception that collection agencies are aggressive and confrontational with consumers. But that’s not how the collection industry operates currently.

When a small business works with the right collection agency, they will not only experience an increase in positive cash flow, but the dynamic between the late-paying customer and the business improves.

If you’re interviewing collection agencies to help your small business, ask them directly how they intend to treat your customers.

Will my small business brand and reputation suffer if I hire a collection agency?

Many people running small businesses recognize the importance of reputation, especially in smaller communities and regions. And if this sounds like you, you recognize that you do not want to be known as aggressive when asking for money.

Your reputation within the region you serve is critical and a reputable collection agency will ultimately recognize this.

Choosing a collection agency that genuinely helps your customers meet their financial obligations to your business and does it in a respectful and dignified manner will go a long way in protecting your brand.

When you discuss this with your potential collection agency ask them about how they approach communicating with your customers including tone, communication style as well as the diplomacy they use to resolve the debt in question.

You can also protect your brand by spending time on the collection agency website. If they repeatedly speak about how they treat consumers with a helpful manner, that can make your decision easier.

You should also spend a little time reviewing their Google reviews. The more genuine and thoughtful Google reviews that collection agency has, the better equipped they will be to keep your customers and protect your brand.

Can my small business afford a collection agency?

Many people running small businesses just expect high fees to help them recover outstanding invoices. But that’s old school thinking.

A small business can afford to hire a collection agency.

In fact, they can’t afford not to.

Collection agencies offering low-cost services are becoming increasingly popular. And that allows your small business to recover mission-critical funds and improve your cash flow.

Another reason to consider hiring a collection agency for a small business is the time, stress, and lost productivity involved in chasing delinquent customers.

Outsource your debt collections and spend more time building and growing your small business.

What if my small business customers dispute the debt?

Disputes in debt collections are going to happen. Your customer may have an issue with the service you provided or there was a misunderstanding. And their first line of defense is to not pay the bill.

The role of the collection agency is to handle those disputes professionally. And if you provide detailed documentation and can clarify the situation, these disputes can be resolved diplomatically.

Small business owners also fear legal complications as a result of debt collection activity. However, hiring the right collection agency just might minimize these.

How do I know when it’s time to hire a collection agency for my small business?

In our experience speaking with small business owners, there is a hesitation to hiring a collection agency. Like many challenges in life and business, many people wait far too long and experience too much pain before they act.

The time to speak with a small business collection agency is now.

It’s not when your small business is hemorrhaging cash flow.

A few clear signs your small business needs a collection agency.

• The negative impact of aging receivables and non-paying customers.
• Repeated attempts to collect with ignored communication.
• Broken promises to pay from customers.
• Growing business with no impact on positive cash flow
• No staff time to dedicate to accounts receivables

Hiring a collection agency that specializes in small business is a smart business decision. It will help you regain control of your cash flow and give you Peace of Mind to make smarter business decisions moving forward.