THE ROLE OF A COMMERCIAL DEBT COLLECTION AGENCY
Why engage a commercial debt collection agency?
Commercial debt collection agencies have an important role to play when businesses are not being paid for the work that they have completed. They do what small businesses often don’t have the time or resources to do, recover outstanding debts for clients.
How often do we hear from business owners or from those who work in accounts receivable that invoices are not being paid, when work has been completed or goods have been delivered?
Businesses in this position can have a number of issues to consider:
- Often they do not have the time to follow up bad payers, although they know that the longer an invoice goes unpaid, the more likely it is that it could turn into a bad debt.
- Often the debt is not a sufficient size to justify the cost of legal action, so what are the options?
- Allocating resources to this kind of work will involve a cost, but no guarantee of recovery
- This work can be time consuming, unpleasant and too often unrewarding – who wants to make phone calls to chase payment?
This is where commercial debt collection agencies can be a pragmatic solution:
- They frequently work on a commission basis, and are therefore cost effective as you won’t be charged a commission unless the debt is paid
- They are experts in their field and are more likely to recover the debt(s) when you have been unsuccessful
- They often have access to in-house lawyers, so they can be cost effective and let you know what your options are from a legal perspective
Establishing a relationship with a commercial debt collection agency before you need external assistance can be important in sourcing the right partner for your business.
Make sure you take the time to engage with a partner who will work with you to preserve your brand and reputation and who is prepared to take the time to understand your business.
You want to make sure anyone who is contacting your customers is not damaging these relationships, particularly if there is potential for more business. Commercial debt recovery isn’t a simple process, ensure you engage a firm that understands managing your public relations is just as important as collecting outstanding debts.
Contact us today to discuss how we can assist your business with professional commercial debt collection (03) 9629 8777