We are going to make a bold assumption. That you have customers that have not paid you yet. They are either late in paying you, or they have not paid you at all. Whether it was an oversight, a dispute in your product or service, or maybe that customer has just struggled financially and they have decided not to pay your business. There are so many reasons why a customer or client has not paid you yet and it’s a tough situation to be in when you’re trying to improve your cash flow.
Hiring a collection agency to help with your cash flow is an important decision you need to make for your organization. The decision should not be taken lightly. You should hire the right debt collection company to make sure that they represent you properly, achieve your goals, be successful in collecting that debt from your customers, as well as treat those customers in a respectful manner.
We spend a substantial amount of time speaking with business owners, accounting professionals, and business managers about how they can improve their cash flow through a reputable debt collection program. Whether it is on the phone fielding inbound calls , or outbound calls to interested businesses and speaking in person at tradeshow , there are many questions that come up when it comes to making a decision about how to hire a collection agency, and of course the right collection agency for your business.
Will a collection agency damage my reputation?
If you hire the wrong company, that is a real possibility. Hiring an agency that does not share your values, and treat your customers with the respect they deserve, could result in damaging your reputation in your community. However, if you hire the right agency, more good than bad can come from that relationship.
When the agency you hire has a goal of understanding the consumer’s situation, and opening up a respectful dialogue with your customer, that paves the way for a successful debt collection call. Professionally trained collectors know how to start a conversation, allow for a consumer to vent their frustrations, and then bridge into a more cordial conversation where solutions can be created by both parties. When you allow a consumer to tell their side of the story, they become part of the solution.
Also, here at American Profit Recovery , if we get on the phone with the consumer and they continue to be angry and upset, we will have to make the decision that this is not the best time to have a discussion about paying their debt. Our collector will decide to revisit that discussion soon by phone. We never want to have the appearance of completely controlling a debt collection call or quite frankly being a bully. By letting the consumer be a major part of that debt collection call, we in turn preserve your relationship with that customer and keep your reputation as a business intact.
How much will a collection agency cost my business?
Cost is another reason why many businesses hesitate to bring on a collection agency. And for good reason. Some collection agencies run completely off a percentage-based system. Meaning, they take a percentage of what they collect from your customer. Because of this, many businesses hesitate to outsource their collections because they do not want to lose all that money in the collection process.
If cost is a concern in your business, consider hiring a collection agency that offers a flat fee system. A flat fee means just that. The collection agency will work your account for a flat fee, regardless of the total owed to you buy your customer. This allows for a couple features. First, it allows you to take advantage of the third-party power that comes with a collection agency. Second, it allows you to control your costs and get more of your money back that is owed to your business. Third, it also incentivizes your business to get those late paying customers over to the collection agency sooner, when it is far easier to collect that money for you.
For a small business trying to control costs as well as larger nationwide businesses that have a regular need for debt collections, a flat fee is one of the best ways to go to increase your cash flow at any level.
What are the clear benefits of hiring a collection agency?
If you’re hesitating about making a decision to hire a collection agency for your business, and can’t get yourself to make that decision, think about these benefits.
First, hiring that agency will free up enormous amounts of your time spent chasing customers that have not paid you. You and your staff can spend that time managing existing customers, managing operations, spending more time getting more customers such as marketing, and free everyone up in your organization to grow your business.
Second, if you just feel uncomfortable calling customers that have not paid you, hiring the right agency takes that responsibility off your plate. Many businesses do not like chasing customers because they feel they’re going to create an uncomfortable situation with a hard-earned customer. Using a third party removes you from that and allows the process to take place on a more professional level. We handle debt collections for dental offices, as well as many other professionals. And many do not like to mix patient relations with business so hiring the right agency is crucial to their success.
Third, a professional collector will create a respectful relationship with your customer or patient. You might be surprised to learn, but here at American Profit Recovery, we have tracked close to 3000 consumer compliments in the year 2020. Those are consumers that we’re calling on to pay their debt, that have actually paid a compliment to that debt collector because they were so nice to them. A professional collector will not only be nice and be diplomatic but can also help that consumer out of a tough situation when they felt there was no air return. And they will thank you for that help.
If your cash flow is suffering, and you have customers that just won’t pay you, it makes sense to understand the collection industry a little better and how a reputable agency can improve your profitability. Do you want to chat? Contact our professionals today and let us show you how American Profit Recovery can help create a respectful dialogue with your customers and improve your cash flow.
We serve clients nationwide and in a whole host of industries.