Running a thriving business can be fun. However, it can all change when you start dealing with unpaid invoices. Recent statistics show that unpaid invoices owed to small businesses in Australia can add up to $26 billion at any one time. It can cause cash flow issues and even stall a business' operations completely. While you can collect your business's debt, chasing delinquent accounts costs valuable time that you cannot recover. Therefore, rather than collecting the debts yourself, you should hire a debt collection agency, saving you time and resources. This article highlights tips for hiring debt collection services.
Sensitivity and Compassion -- In the past, debt collectors had a bad reputation for harassing and threatening delinquent debtors, specifically through violent means. However, the approach does not work today because it is illegal and destroys business relationships that took grit to build over time. Therefore, when looking for debt collection services, choose a provider whose mission is based on sensitivity and compassion. Reputable debt collection agencies understand that there are various understandable reasons for unpaid invoices. As such, they focus on working out a way for debtors to pay what they owe without severing existing relationships. For instance, professional debt collectors can propose payment plans that will not affect debtors' financial situations significantly.
Consider Total ROI -- Since the objective of most small businesses is to save money, they tend to focus more on the percentage that a debt collection agency charges. Therefore, a collector that charges a low percentage is more likely to get a contract than one who charges a higher percentage on the amount collected. Unfortunately, the strategy can be counterproductive because you risk losing money if a debt collector recovers very little money. Therefore, when choosing a service provider, focus on the return on investment. If a collector guarantees settlement of more than three-quarters of unpaid invoices, it does not matter if they charge a high percentage.
Uses Skip Tracing -- Although some debtors can be stubborn, the right approach can get them to pay the invoices they owe. However, others can be difficult to work with and might even skip town to avoid paying their dues. If your debt collection services cannot locate debtors, you may as well write off the debts. Therefore, you need a debt collector with access to various databases that help locate debtors who have skipped town. The databases include job applications, utility bills, loan applications, and credit reports. Skip tracing is particularly useful when a debtor has been intentionally ignoring your calls or emails.
To learn more, contact a resource that offers low-commission debt collection services.