When it comes to the long term sustainability of a business, timely payments hold the key. Unfortunately, that’s not always the case. Sometimes customers delay their payments, and, as a result, your business faces problems like cashflow. This is the tipping point when your routine business operations start to become inefficient.
So what to do when you are stuck with debtors who are neither picking your phone calls nor responding to your letters and emails? Well, in such a dark phase, a collection agency can prove to be a ray of hope for you. If you are skeptic about the productivity of a collection agency, you must read about its top 4 benefits:
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Recovery of debt
You are good at making a product and selling it because it is your business. You excel at it because it’s your job. Similarly, a collection agency’s job is to collect payments. They are well-equipped to contact the debtors and clear the debt.
Regardless of what your business is all about, a professional collection agency can offer you certain packages that go best with your type of business. So much so, you can even find collection agencies that can readily buy your bad debts.
Collection agencies are also effective because they can scare the hell out of the debtors due to their aggressive behavior. By reporting the unpaid debts to the credit bureaus, a collection agency can do the damage to the debtors’ credit score for nearly 7 years.
As we know, a healthy credit score is the main prerequisite to obtaining any kind of financing, and this is what forces your defaulters to be on their toes.
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Documentation
Due to a variety of reasons, it could be difficult for you to maintain all the records of every single debtor. On the other hand, a collection agency masters this task. From the necessary tools to a skillful staff, a collection agency has everything it takes to document all the communication with debtors.
This extensive documentation will come very handy when you are fighting against your debtor in court. When you have every single detail in the black and white, you are more likely to win the legal battle in the minimum time period.
Moreover, if you sue a debtor, you may or may not know the best lawyer in the town. Again, having a collection agency by your side, you don’t have to take this headache. It will look after the court proceedings right from the beginning and as effectively as done by any renown debt collection agency Texas.
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Provides a legal cover to your business
Well, it is natural to be hostile with debtors who have been delaying payments for a long time. Experts are of the opinion that if a debt lasts longer than 120 days, you are less likely to get it from the purchasing party. Such eye-openers could push you to treat your debtors harshly.
However, there are certain laws that protect consumers. By all means, you can’t transgress them otherwise, a debtor can even sue you for violating his rights. Since you are an outsider, you may not be well-versed with these laws. That’s where a collection agency can guide you about what you should do and what you should avoid practicing.
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Enhances workplace productivity
There is nothing more frustrating than trusting a customer and then chasing him all the way down to get your money back. How can you plan for the future growth of your business when you are not having sufficient cash flow to even get on with the regular operations?
What would be the productivity of a workplace where the majority of the employees are engaging with old debtors instead of looking for new customers and opportunities? It is very easy for workers as well as the owner to drop shoulders in such a demotivating atmosphere. You might survive without money but surely not without motivation.
When you hire a collection agency, it helps you to concentrate only on your business. You don’t have to invest your time one bit in calling or sending emails to the debtors anymore. The collection agency will do all that on your behalf, and in the meantime, you can assign tasks to your staff that can actually enhance your bottom line.
As a matter of fact, the success rate of collection agencies is staggering 90.4 percent. So if you have not taken the services of a collection agency yet, you are missing out on a lot.
The final verdict
Imagine you have received a project but lack the necessary funds to complete it. You said yes to the project because you were expecting payment from your debtors, but in the end, they showed their back to you. You can avoid such setbacks very easily just by getting in touch with a collection agency on time.