Updated: Jun 23
Unpaid invoices from clients are not uncommon; it is estimated that approximately 10% of invoices are never paid or paid very late, so the company is forced to write these invoices off.
Why should your business hire a debt collection company to go after unpaid invoices?
Efficiently maximizing debt recovery
Generally, internal employees do not possess specialized debt collection skills and knowledge, which include not only making telephone calls, but also knowing when to call, how to negotiate, what dunning letters to send, what procedures to follow, and what legal options to explore. Therefore, a debt collection agency may be more practical than having employees do a job outside their areas of expertise. Especially, small businesses with limited employees and time may find collection companies are a more efficient alternative to internal collections.
Maintain your relationship
Another reason to hire a collection agency is to preserve a positive relationship with its clients.
Rather than your business, you can let the collection agency be the "bad guy" who handles the collections process. A third party can help you maintain your client relationship and even keep you from losing the debtor as a client.
Debt collection agencies such as Fair Capital adapt according to the needs of each business they work with — as well as to debtors. Usually, a debt collection firm will offer your debtor various options to encourage them to pay. Additionally, as necessary, a collection agency can negotiate payment plans and process payments through different channels (phone, online, debit, credit, automated clearinghouse, etc.)
Professional debt collectors are trained to know when and how to escalate the collection tone to get those who simply won't pay to pay.
So, how can you tell if your business needs to hire a collection agency? Consider these eight tips. If any of these apply, you may want to consider hiring a collection agency.
We Can Help
As a business owner, you understand how vital cash flow is. Clients who do not pay your company's invoices can seriously affect your company's profitability.
When your debt collection attempts have not yielded results, give us a call because we can help.