6 tips for a Smart Business Debt Collection solution

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Not chasing unpaid Invoices will kill your Business

 

Is your company’s cash flow struggling due to late or non-paying customers? A smart choice for a Business Debt Collection solution will help solve that.

Well, it will not surprise you to find out that you certainly are not on your own. Most companies do have problems getting payment when they provide a  service or product to a customer. In fact we recently reported that 80% of SME’s in the UK have problems with non payers.

Unpaid invoices cost you time, money and resources. It hits hard when that service you have provided in good faith goes unpaid – This is a paradigm of modern business, but one that does not necessarily have to hold you or your enterprise back.

Debt Collection is a modern and cost effective recourse that is readily used by companies across the UK. As with any industry, it really does pay to do your homework and avoid the sharks that can lurk in the waters.

Beware of the ‘No win – No fee’ brigade and when something appears to good to be true, more often than not it is because it is. And when a Debt Collection Agency claims “Our service is risk free” think hard!

Of course there is a risk – The risk of your business brand, the debt value itself and not to mention your liability for the actions taken by any purported DCA.

There is a greater transparency in the UK Debt Collection these days and most credible DCA’s are licensed by the Financial Conduct Authority.

Employing a Debt Collection Agency (DCA)

You may not have considered instructing a Business debt collection agency to act on your behalf in recovering monies owed, because you may have thought it was maybe a little ‘heavy-handed’, but once the misconception of how a reputable DCA operates has been dispelled, it soon becomes apparent that it is possibly the best option available.

So, with that in mind, here are 6 tips on why a quality debt recovery service is the best option when addressing this spiky issue:

Tip 1No Collection – No Costs – Most debt collection firms operate on a basis that means if they do not collect, then you do not have to pay any collection costs. Compared with conventional methods of chasing payment, this is a very cost-effective way of resolving matters, as no expensive solicitors are involved.

For a Premium Debt Collection service, there may be an instruction fee which is can be claimed back on your behalf and results in a fully inclusive service with no hidden fees. You should also receive a much lower commission payable on collection.

Tip 2Businesslike, Professional Approach – The days of aggressive ‘strong arm’ tactics used to scare clients into paying are a thing of the past. Whilst being necessarily direct to achieve their goal in good time, a reputable collections officer will be compassionate and understanding to the debtor throughout the process.

Tip 3No charge per hour – Dealing with most collection professionals is extremely simple. There is no ‘fee earning’ and most will not charge ‘abortive fees’. There is an end goal and a usually commission payment of usually between 10-20% to the agency upon achieving the end goal – getting you paid.

Tip 4All Cases Considered – There is no snobbery in the debt collection industry. No matter who you are, if you run a legitimate business that is owed money, then your case will be taken on its merits.

Tip 5Experienced Collectors – A reputable and accredited professional collections officer will have been employed for their compassion, understanding and knowledge of how businesses operate. They are not paid thugs, rather an extension of your business and they will and should act accordingly.

Tip 6Speedy Resolution – In addition to being cost-effective, the work a DCA does for your company is very quick compared to traditional litigious methods.

So, there you have it. Using Professional and reputable debt collectors can mean the difference between a business that dies on its feet due to bad cash flow and one that thrives, because it gets paid on time.

Bit of a no-brainer, wouldn’t you say? The modern day UK Debt Collection industry is more professional than ever, largely thanks to new governance from the FCA and also the efforts of the Credit Services Association, which is the industry’s only trade association.

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