Keeping an open stream of income is important for any business. Salaries need to be paid, lights need to stay on, and food has to go on the table. And when it comes to reporting to your superiors — a number that puts your department in the black is always more desirable.
That’s why keeping your incoming payments on time and up-to-date is vital, and while you might not have control over the payment patterns of your debtors, there are steps you can take to mitigate their behaviour and help manage their punctuality.
Don’t let an overdue account tarnish your yearly results. Using debt collection guidelines or hiring a debt collection agency to provide debt collection services can help you keep on the right side of upper management, especially when it comes to reporting at the end of the financial year.
A good debt collection agency offers multiple benefits for you and the organisation, so we’ve put together a quick list here to help you qualify the agency you’re partnering up with and managing expectations in the long run.
What can a good debt collection agency do for you?
1. Save you time
You’re in business. You understand better than most that time means money, and that chasing tardy debtors can be a time consuming proposition and a drag on your emotional energy. Multiple phone calls and follow up correspondence are not uncommon when it comes to chasing larger debts and when payment arrangements are eventually made, time that you should be spending on your own workload gets taken up by the back and forth of chasing payment installations.In addition to this, persuading someone to pay their bills can take a level of specialist skills, which might be something you don’t have time to learn. Even with some debt recovery experience under your belt, certain cases can be relentless and bringing in a debt collection agencies in Australia can take the burden off you and keep you focused on the main tasks at hand.
2. Maintain professionalism
A good debt collector will know the debt collection guidelines inside out and calmly persuade your client to pay their debts, without being rude, forceful or harassing. This reflects better on your business as a whole and helps to maintain your sterling reputation amongst the general public and your peers.
An experienced debt collector can look past the problem and find the root of the issue, working collaboratively with the debtor to resolve the unpaid account quickly and amicably.
3. Provide legal expertise
An expert knowledge of legal parameters can sometimes be invaluable. The law can be hard to navigate, especially when it comes to financing and debt. That’s why a collection agent with a close relationship to debt recovery lawyers can help reduce the pain of legal action or even avoid it completely.
A good collection agent will know the law, your rights as a creditor and the rights of your client, helping everyone stay on the straight and narrow and avoid a costly day in court where possible. In cases where every approach prior to legal action has been exhausted, your account manager can recommend the best course of action to eliminate any irrelevant steps and prevent a disappointing outcome.
4. Offer complementary services
A good debt collection agency will often offer complementary services including basic tracing mechanisms to help locate debtors, SMS capabilities to extend the lines of communication, as well as faster access to multiple files and reports with a client portal.
In addition, some debt collectors will further extend their service set with field calls, repossessions, tailored document services and legal assistance–for a pre-approved cost. It goes without saying, but all sensitive or confidential information should be handled with the utmost care and professionalism.
5. Improve your success rate
Like most things, debt recovery is best left to the specialists. A professional can help you recover your debts before they get old or forgotten, and a streamlined process can deliver speedy results that might not be possible when the task is under resourced. Choosing an experienced collection agency with a proven track record can mean a greater rate of success when it comes to recovered payments.
Tip: A general rule of thumb our clients follow includes an in-house attempt to recover debts with any that still remain overdue after a quarter being handed over to the agency, freeing up time that would otherwise be spent chasing the same accounts over and over with little to no result.
6. Become a professional partner
The most pleasant part of the debt recovery process can be working with someone professional. With a dedicated account manager, you get wide open lines of communication, scrupulous and transparent invoicing and an efficient use of your time. Plus, there’s less raw information for you to sift through, and following up on progress is as easy as a phone call. Because business doesn’t need to be unpleasant.
7. Charge you for only what is recovered
When it comes to debt collector fees, don’t let a bad debt cost your company more than it needs to. A good recovery agent will only charge you when the payment has been recovered. Avoid lock-in contracts as they can often add to expenses if the debts turn out to be unrecoverable in the end.
To get an estimate of what percentage collection agencies charge for a smooth, professional service that delivers results, check out our fee schedule.
When it comes to unpaid accounts, don’t let late payments hamper the progress in your organisation. Use our list to qualify a debt collection agency or submit your debts directly. And if you prefer to handle it in-house, try optimising your debt collection process with our collection letter template pack – designed to politely persuade your clients into keeping their payments up-to-date.