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Recovering Unpaid bills to Protect your Small Business

Gregory Hall

Running a company is hard and there are times when the cash-flow suddenly drops. Small business owners have been hit hard due to the coronavirus pandemic because they got absolutely no time to prepare for these unexpected lockdowns and sudden loss of business. Should they protect their cash reserves or trim their workforce? Small business owners share a very personal relationship with their employees, letting them go is not usually an option.

One of the biggest concerns for any business owner is when customers don’t pay you after the assignment is complete or when the product is delivered. With so many things that you have to do, worrying about getting paid should ideally be the last thing on any business-owner’s mind. Unpaid bills are a very genuine concern for any business as it may restrict their ability to remain profitable. The inability to recover money from overdue accounts receivable can result in the closure of their businesses and employees losing their jobs. There is nothing wrong in trying to recover money past-due bills before they start hurting you back.

Depending on what accounts receivable system your company is running, you could make non-paying customers virtually non-existent. Subscription-based businesses are at the maximum risk of non-payment. Companies can improve their services and their payment methods in many ways. There could be loopholes or faults in your own billing system that is letting these customers get away without paying for them. This is where hiring a professional collection agency for small business becomes essential.

 

It is most important to hire an ethical collection agency. Unlike the popular belief, ethical collection agencies use an amicable approach and work with your client without using any intensive approach. The biggest benefit is that this approach does not ruin the business relationship between the two parties. No harsh communication happens, your collection agency works as an extension of your accounting department. It is a well-established fact that people are more willing to settle their unpaid bills when you work with them and not against them. Collection agencies have several tools, techniques, and scrubs which improve the accuracy of their collection methodology. Never hire a collection agency, which takes an intensive approach to recover money by over-pressurizing your clients. These agencies will destroy your reputation.

Collection agencies offer a variety of services, which includes written demand and personal calls made by a collector. It is advisable not to report the debt to credit bureaus unless absolutely essential. Your clients are more likely to pay when a third-party debt collector is making calls versus when your employees are trying to recover money by themselves.

There is no positive outcome when a customer is not paying for the service or product that you have already delivered. Your customers may be intentionally delaying the payment or facing some temporary financial hardship, but if your business closes down due to insufficient working capital, then you and your own employees will face a similar hardship. An ethical collection agency attempts to make your customers dig their pockets a little deeper or prioritize your invoice over other bills they may have. Having your own staff to work on overdue accounts receivable is costly, due to this many companies outsource these delinquent accounts to third-party collection agencies. With business collection agencies working on your behalf, they will drastically cut down your unpaid invoices in a diplomatic manner and charge a fraction of what it would take to recover these overdue bills yourself.

By having a well-defined credit company policy and an uptight system, you can reduce the number of non-paying customers. Businesses must constantly find more ways to minimize the risk of losing money from delinquent customers, one of the most effective approaches is frequent billing and automated reminder calls. Outsourcing your recovery work to these agencies means you are not the bad-guys anymore when trying to recover your own hard-earned and well-deserved money.

You have a better chance to recover money by using a collection agency than yourself. Unsuccessful follow-ups with customers using your own in-house staff will increase frustration among your employees as it diverts their attention from core business responsibilities. With a collection agency on your side, you can continue to focus on protecting and expanding your own business without worrying about non-payment of customer bills.

Here are some of the positives of having an outsourced collection agency:

  • Reduced collection costs

  • Reduced delinquency rates

  • Save time & money

  • Professional tools at their disposal

  • Business relationships preserved

  • Cost-effective

  • Avoid layoffs in your own company

  • And much more

Collection agencies are getting far better with every passing year. They find more and more effective ways in which you can get your money back.  Companies of all sizes can transfer the accounts of non-paying customers to these ethical collection agencies.