A debt collection agency can be the right choice for many businesses that are struggling to recover payments from past clients or customers, as the collection agency may be more skilled at those collections and therefore more successful. It can also mean less time trying to collect old debt and more time actually working your business. Note when it might be time to hire such a service, and how they can benefit your company.
Time spent analysing debt
Using a debt collection software can mean making robo-calls to customers and clients, and having a space on your website that people can use to pay their debt. This can be somewhat effective in collecting some debt; however, you may still spend inordinate amounts of time analysing the debt you still have, the payments you've received, what methods are successful, and the like.
This can be in addition to doing more than what your software program can do, meaning making phone calls and processing paper checks. Note the amount of time you spend every day trying to manage your company's debt; this includes all the paperwork, payment processing, report generation, and everything else, and not just making phone calls to collect. A debt collection company can usually manage all those tasks for you, including reporting and analytics, freeing your time for your business.
You're not recovering much debt
You may assume that you're saving money by trying to recover debt on your own, but consider how much debt you're actually recovering through your own phone calls and letters. If the time spent in this work has just a very small payoff, then hiring a collection agency is the better option. Consider that you would no doubt adjust any product or service your company offered if it had a small payoff, so ask yourself why you're spending so much time on managing a part of your business that also means a very small return.
You can't reach debtors
If you always have letters returned to you, reach disconnected phones, or otherwise cannot reach your debtors, it may be time to hire a collection service. They will know how to perform a skip trace, meaning that they can find where someone has moved to, and can also track down new phone numbers and other potential contacts. Note, too, that simply trying to find someone adds to the time you spend in collections; even processing returned letters and eliminating addresses and phone numbers from your database is time you could better spend running your business.Share