When to Hire a Collection Agency?
If you are a business owner, there may come a time when your customers don’t pay on time, or worse yet, don’t pay at all. You may want to ignore it if it only happens a couple of times, but what happens when it continues? Perhaps you attempt calling your customers or decide to send them collection letters. If they still don’t pay, your best bet is to hire a collection agency.
Suppose you’ve never hired a collection agency before. It may seem daunting. Nonetheless, it’s important to remember that your cash flow is at stake. You have money to collect, and a professional debt collection agency is experienced in managing past due accounts properly and legally.
The most significant error that business owners make when managing accounts receivables is to put off hiring a debt collection agency. If you’re curious when it’s time to hire a debt collector, the standard answer is always sooner rather than later. Statistically, the longer you wait, the less likely you will get paid. It’s reasonable to give your customers some grace time, but after 90 days, the probability of collection on past dues goes down significantly.
Benefits of hiring a collection agency:
Chasing overdue debt can take a lot of resources, but you and your employees can dedicate your time and energy to other critical tasks by hiring a professional. This time can be reallocated to implement new policies and procedures regarding payments, educate customers about payment options, or focus on other high-priority tasks. Even if you don’t want to hire a debt collection agency, doing so can greatly benefit your business.
A good collection agency knows how to collect on past due accounts, and they know how to do it legally. When they contact your customers on delinquent accounts, their primary focus is on assisting you to get your money back. Using a collection agency also improves the chances of your customers paying in full, and will help you get your money faster.
Reasons why business owners hesitate in hiring a collection agency:
Many business owners put off hiring a collection agency. There are many reasons why you may wait, including:
- Reputation: You may be concerned that it will harm your reputation when using a debt collection agency. Perhaps you’re worried that your customers will negatively perceive you or that it will destroy relationships with your customers. The truth is that most people will respect a business that has a structured approach to debt collection.
- Cost: There’s a cost associated with hiring a debt collector like any other service you outsource. Many businesses avoid hiring one for this reason alone. Collection agencies usually receive a percentage of the amount recovered, meaning the majority of the money will still go back into your business. On the other hand, you risk not getting paid if you don’t use a collection agency.
- Loyalty: Many businesses are loyal to their customers, even when they become delinquent. It’s understandable to be committed to your customers, but there comes a time when your customers need to be reminded of how paramount it is that they pay their bills and the impact not paying has on your business.
- Pride: You’re not alone if you don’t like asking for help! Many businesses are resistant to calling in outside help because they’d instead do it on their own to stay in control. If you want to do this, make sure you know when to call in outside help.
Are you ready to hire a reputable debt collection agency for your business? CGI Credit Guard has been in the industry since 1994 and is no risk to you – no collection, no fee!
Submit your collection here.
When to Hire a Collection Agency? When to Hire a Collection Agency? When to Hire a Collection Agency? When to Hire a Collection Agency?