What is the practical alternative for business organizations to recover delinquent accounts? You may have a good debt recovery plan but the implementation aspect is fairly difficult. With a limited number of employees
It is almost impossible to collect outstanding debts unless your staff
Will just concentrate on sending letters, emails and calling clients with arrears.it is too laborious and time-consuming. For bigger companies, a debt collection section is one option but this will mean the need to train people.
This seems to be a waste of human and financial resources. You have to pay full-time employees who will do nothing for the company but to follow-up and try to collect unpaid obligations.
Outsourcing Collection Functions
From the short-term perspective, commercial debt collection is advisable. However, based on your long-term goals, this is an impractical business decision. The viable choice is to outsource the functions to experts. This procedure is more cost-efficient, safe and comparatively effective. The professional collector of financial arrears is very adept in this particular job. He or she possesses the experience, techniques, network and flair to deal with stubborn debtors.
“Today, there are three kinds of people: the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s.”
– Earl Wilson
The expertise of these service providers is to handle accounts which are almost impossible to retrieve. The debt recovery agency has the track record in enforcing collection and combines tenacity with patience to reach out to borrowers. Moreover, the business owner and employees should concentrate more on acquiring more sales or build up the image of the company.
You run the business as if you were hard-pressed to generate revenue and leave the matter of bad debts and collection to a reliable agency. This outfit together with its trained staff should accomplish the task for you.
It is not even costly since most of the debt collection agencies only get a certain percentage of the amount that have been successfully collected. Maintaining a department is more expensive.
The positive aspect of having an in-house collection department is that employees can maintain the professional relationship between your firm and the clients. This is the benefit of having a team to do these functions. With a full-time group, the company will have full control of the collection efforts. Once you outsource, there is no guarantee that management can have a hand in the effects of the collection efforts.
The compensation package for the collection specialist should be competitive so that the company can be assured of a highly-qualified individual. Not all employees possess the aptitude to convince or compel clients to pay unsettled bills.
If this is the case, outsourcing the responsibility to debt collection agencies is still the best decision.Regardless of whether you subcontract collection functions or hire employees to do this for you, the recovery of long-standing debts remain as the tall order of the day.
Aside from this, the more important goal of the business owner is to stay solvent. While recovering your money is a major factor, running the company and making it financially viable is still the priority of entrepreneurs.