Should a small business hire a collection agency?
Is your business suffering from unpaid invoices that mount up month after month? This is where collection agencies come into play as you can outsource your collection services to them, thus effectively recovering payment dues from your clients all the while saving your time to grow your business! Such debt collection managed services have proven to be quite a boon for many small to medium sized businesses.
What do collection agencies do?
As a small business, you may have little time on your hands to go chasing after clients to collect your due payments for services rendered. Besides, as these debts get old, it becomes even more difficult to collect from the client. Collection agencies save you from all this trouble by being the middleman and collecting your debts for you for a small commission. Once the debt is collected from the client, they are compensated with a previously decided percentage of fees from the total collected amount.
So should you hire a collection agency?
If you see a frequent number of accounts where payments are not being made even after 30 to 60 days, it’s the right time to contact a collection agency. The agency then works on recovering and collecting funds from such delinquent (where payment is more than 60 days late) accounts for you.
If you do hire an agency, we would suggest that you do some research and hire the best one out there. Ask about things such as licensing certificates, error insurance policies, and their knowledge of legal ways to recover debts. Remember that a good collection agency will maintain good relations with your clients while still collecting your dues efficiently. At IDC Technologies, we focus on streamlining your invoices as well as help you get in touch with such top-grade collection agencies.
Key benefits of hiring a top notch collection agency:
Knowledge of legal laws
An experienced collection agency knows the various laws and regulations when it comes to the debt collection industry. This is why they are best suited to navigate these various laws and employ the best techniques to pursue your payment dues ethically. This eliminates the risk of well-informed clients trying to sue you or the agency on the grounds of violation of rights.
Offer various flexible programs
Collection agencies offer different programs suited for various business models. This allows you the flexibility to choose a program that fits well with the needs and requirements of your business. Besides, some agencies work for the commission after debt recovery, others may work for you for a flat fee. So, you also have the option to choose an agency according to your convenience of payment methods.
Enable faster recovery of debts
When a debt collection agency gets in contact with your clients, they tend to pay a lot faster! This is because such agencies pose a legal threat for your debtors than you do, as non-payment of debts tends to negatively affect a debtor’s credit score. Thus, the payment process is accelerated, without you having to spend your immense time and efforts trying to recover these debts.
Maintain crucial documentation
Collection agencies maintain records of each time they contact the debtor. In extreme cases, in case a business decides to sue a debtor, these records work as important documentation to show during court proceedings that the business made every possible effort to recover the debt. In fact, these documents may also be helpful for filing for tax deductions if the payment dues cannot be done by the client.
Now that we’ve given you all the information on collection agencies, you can make an informed decision based on your business requirements. We believe that such third party debt collection services are a great way for you to focus on your business, while also ensuring that you recover your funds from clients on time.