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Published On: Thu, Jul 20th, 2017

3 Advantages of Engaging a Debt Collection Agency

When debt is outstanding, a business may begin to suffer a cash flow crisis. This crisis can often lead to the company being unable to meet its obligations and even to closure. Small businesses are particularly prone to the dangers of a cash flow crisis.  Unfortunately, however, very few of them seem to understand the advantages there are in hiring a debt collection agency to follow up on unpaid debts.

photo via Flickr stockmonkeys.com

Most people are concerned about the costs associated with debt collection. However, this aspect is very important to any business and can help you save money in the long term and stimulate the growth of your business.  Debt collectors have been trained at this and are experts in making sure that you recover your money.  Additionally, they have access to resources that you may not have, making them even more effective.

Basic Guidelines

When choosing to use a debt collection agency, you want to set some limits for yourself that can help you determine when it is too difficult to recover a debt and when it is time to allow the debt collectors to step in.

  • Debt amount – If the amount is small, it may not be worth your while to bring in the debt collectors, so figure out a threshold of what amount you will collect and what amount warrants the attention of the collection agency.
  • Period of time – How long past due is the debt?  Usually, companies will give a credit period of 30 or 60 days. You may then be able to say that you will pass on the debt to the collections agency if it passes the 60-day mark.

Whatever you decide should be in the best interest of the business. Since you are the one involved in the day-to-day running of the business, you have a better idea of what is appropriate for you.

Advantages of Working with Debt Collectors

Debt collectors like inkasso.is can help your business by doing the following:

  • Enabling you to save your resources – Some of the most valuable resources you have are money and time. You don’t want to waste time working on collecting debts when you could be marketing your business and carrying out other activities to grow it. Additionally, your staff does not need to stop working on what matters in order to chase debt. You can allocate that to someone else and use your resources in other ways.
  • Helping you maintain your relationships – One of the ways to maintain relationships is to separate yourself from the process of collection. Since you will not be on the phone chasing up the client, chances of saying things in anger will be reduced and the relationship will therefore be maintained. With a collector who is respectful and professional, you can recover your money and keep the relationship intact.
  • Making it possible to earn money that would otherwise be written off as bad debt – Whether the collector makes a recovery of the full sum or a part of the amount owed, you will be better off than if no money was collected at all. You may also pass the debt collector’s fee to the person or business owing so that your company does not have to foot the bill for it.  

Author: Charlie Brown

About the Author

- Outside contributors to the Dispatch are always welcome to offer their unique voices, contradictory opinions or presentation of information not included on the site.

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  1. […] and booked. Just one collection agency can have a debt at one time. There are several varieties of engaging a debt collection agency. As an example, a business saying it is a non-profit agency isn’t necessarily excellent. […]

  2. […] kind of agency is known as a Engaging a Debt Collection Agency. In such instances, you you have a right to sue the respective agency. Various agencies use various […]

  3. […] your employer does not allow you to receive personal calls, then it may not contact you at work. Engaging a Debt Collection Agency is trying to collect numerous debts from you, the debt collector must offer another notice for each […]

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