If you run any kind of business, be it a product based or a service provider, you no doubt at some stage have come across bad debtors. Maybe you are suffering from them right now? Having to deal with customers who are refusing to pay is both stressful and difficult and the longer it goes on the more your cash flow and business is negatively affected.
Your business needs to run efficiently and smoothly and having to chase up debts is a waste of time and money that could be spent developing or improving the business. When cash flow is affected it causes many problems in all areas. Wages still need to be paid and suppliers need payment to maintain working relationships. Many small and fledgling businesses have been known to fail and go bust simply because of late payments and bad debts affecting cash flow.
Arranging for Debt Recovery
Debt recovery agencies can really help you if you find bad debtors and late payments have started to creep into your business. You will no longer have to waste your own time or that of your secretary or office chasing non paying customers. Debt recovery agencies get your money as quickly and efficiently as possible and are very cost effective.
There are various ways in which you can arrange for debt recovery to take place on your behalf, but first let’s look at a few guidelines when choosing a firm.
Make sure that the debt collection company you choose has a good reputation. After all, they are going to be the face of your business and you preferably do not want to ruin working relationships. A good debt recovery firm will not use any bullying tactics or threats and should be able to provide you with a list of references from happy customers to prove it.
The debt collection agency should talk to you to establish the nature of the debt and what process they are going to follow to recover your money as quickly as possible. They should also discuss their fees for this service which is typically 8-10% of the money recovered. If they fail to recover the money, then you should owe nothing (no win no fee), but check this before employing them.
A professional debt recovery agency should be a member of the CSA (Credit Services Association) for your peace of mind. This is a governing body which makes sure that debt collection guidelines are strictly adhered to and professionalism is guaranteed.
When choosing an agency to represent you and recover your money, take the time to make sure you choose a company which you feel best understands your needs. There are many companies available online and not all have the same high standards, so choose carefully.
If you are in business then you may have colleagues or fellow business owners who can recommend a good debt recovery agency in your area. Some collection companies can handle everything online for you and keep you updated by phone and email. It is a good idea to discuss your requirements, agree a plan of action with them and establish commission costs before you employ their services.