Debt collection is an essential business process. That explains why every business that’s keen on staying afloat must develop a comprehensive debt collection strategy.
Although most startups choose to handle debt collection on their own, it becomes uneconomical when the number of overdue debts shoots up. At that point, it makes more business sense to hire a professional debt collector. Because debt recovery is a continuous process, establishing a long term relationship with a debt collection agency becomes even more sensible.
Of course, by working with a debt collection agency Melbourne or Sydney, you get more time to focus on your core business. But why is it crucial to develop a long term relationship with an agency?
Below are some of the reasons why this is important.
To Avoid Fresh Negotiations Every Time
Searching for a debt collection agency and negotiating fees every time is a very tedious activity. That’s, however, not the case when dealing with a debt collection agency with whom you already have a long term working relationship. With such an agency, all you’ve got to do is forward the files relating to your debtors to them and then they’d embark on the recovery process.
Understanding Your Clients
When working with a debt collection agency Sydney or Melbourne, the agency must get to know your debtors for ease of follow-ups on the debts. Where there is an existing close working relationship between your customers and the agency, it becomes easier for the agency to come up with customised payment plans to improve the efficacy of the debt recovery process. There is no way an agency is going to know your debtors if you don’t have a long term working relationship with them.
Flexibility in Fee Payments
Just like your customers, your business also has its high and low seasons. That means you may not always be in a position to pay your service providers, including the debt collection agency you’re working with, in time. When you face financial trouble at a time when you’re just negotiating a deal with a debt collection agency, things might go haywire for you. If, however, you’re dealing with an agency with which you have a long term working relationship, the agency would readily offer services for later payment.
Proper Records of Debtors
As a business person, you must keep proper records of every debtor. The records are important for your internal business use and the debt collection company. Where you have a long term relationship with a debt collection agency, you don’t have to always send all the information relating to each debtor to them. All you’d do is to send payment updates to the recovery agency and they’d handle the rest.
Save Time and Money
Time and money are very precious resources. If you want to save time in debt collection, establish a long term working relationship with a debt collection agency. You save time, first, by not renegotiating every time you want a certain debt to be pursued. Second, you save time because the agency takes the responsibility of following up on your debtors as you focus on the objectives of your business. Saving money is also two-way. If you put your focus on your work while an agency focuses on following up on debtors, your productivity will grow, and that means more income. Secondly, because you’re not renegotiating every time, you’ll probably get a friendly flat rate and concessions.
There is no denying that debt collection is essential for your business. Therefore, for proper business growth and efficiency, you must lay down an effective debt collection strategy as part of your business operations. With a good strategy and a long term relationship with a debt collection agency, you’ll realise better loan clearance from your debtors.