Why Hire Professionals for Debt Collection?

Three reasons to hire a professional debt collection agency.

Overdue invoices can seriously impede cash flow, no matter the size of your business. A survey by MarketInvoice last year revealed that 72.5% of invoices are paid late and that the average amount it takes for an invoice to be paid in Australia is 26.4 days overdue.

A Federal Government discussion paper from the Department of Innovation noted that:

“Late payment … adds financial and administrative costs, reduces the potential for investment opportunities, damages business relationships and fuels business uncertainty … This weakening effect on businesses, particularly small businesses, compromises their competitiveness and survival.”

The paper also states that 90 per cent of small business failures are caused by poor cash flow. Timely and efficient debt collection, then, is crucial to keep that cash flowing – but how to best manage it?

Debt collection, more often than not:

1. Time consuming
2. A frustrating exercise – for all involved
3. Not what you are trained to do.

So, what is the solution?

Professional debt collection agencies saves you time.

When starting out in business, it’s tempting to do everything yourself to save on costs. But the question to ask yourself is, what’s the real cost of this? Tasks like debt collection distracts you from your business and can dilute your contribution to it. The answer? Delegate it to a professional. Hiring a professional frees you up to do what you do best and ensures the task at hand is taken care of effectively – saving you money, and no doubt headaches, in the long run.

… And money.

Debt collection agencies do just that: collect debts. Their focus is unwavering and their strategies are effective, ethical and efficient. Consider their fees and charges an investment, not an expense. Most debt collection agencies offer a “No Collection, No Commission” based pricing model, so they will only get paid if they recover your debt.

Debt collection agencies preserve your client relationships.

Hiring professionals means it’s them chasing the money, not you. This ensures your relationships are preserved as best as possible. Go for an agency with an established reputation. Talk to them and ensure you feel comfortable in them dealing with your clients. Be sure to do your homework – check their references and ask for testimonials from people who have used them in the past.

The statistics above uncover overdue invoices as a very real threat to those in business – hiring debt collectors is not only a move towards limiting the damage that overdue invoices can have on your business, but ensures that something so crucial to your business is left with an agency that’s accountable and solely focused on the task at hand. This leaves you with the time – and the peace of mind, to be able to focus on growing your business.