Good cash flow is an integral element for the success of any business. But it is also true that keeping your company’s cash positive permanently is not easy.
It is not always black and white. For one thing, you are going to have to consistently keep a bird’s eye view on your expenses, ensuring that you don’t end up spending more than what your net earnings are.
However, the greatest enemy of a positive cash flow is outstanding dues; it is a constant, perennial obstacle when you talk about collecting payment from your clients or customers.
In a perfect setting, your organization would instantly receive payments for all the services you provide or the products you sell.
Unfortunately, this isn’t how things go in the real world. This isn’t to say that all clients don’t pay up on time, but more often than not, many of them fail to make timely payments.
In the real world, a lot of business owners are left worrying about an increasing pile of outstanding invoices.
And while this will certainly affect your cash flow, what is even a bigger problem is that the longer you take to collect them, the more difficult it will get to recover them.
A solid solution to your debt collection problems
You have to ask yourself, between managing your business, overseeing day-to-day tasks, supervising the staff, will you ever get the time and energy to recover delinquent accounts? Probably not.
Well, fortunately for you, you can take a back seat and let a third party handle this annoying problem. Outsourcing your cash recovery is the single wisest decision you can make to permanently lay your woes to rest.
Why you should collaborate with a debt collection agency
Dedicated focus and time
One of the greatest advantages of a debt recovery agency is the fact that they only have one mission – and that is to help you recover outstanding invoices.
Unlike many business owners who take out the time to collect delinquent accounts, a third-party agency can devote all their time and energy into devising strategies that will help recover your debts faster.
They have the resources and the focus to get quick results.
They are flexible
Reputed debt recovery companies understand that businesses have varying needs when it comes to adjusting their cash flow by injecting recovered outstanding invoices.
That is specifically why debt collection agencies offer a myriad of different collection strategies and programs that will enable you to quickly recover unpaid debts.
The best benefit for you here is the fact that you will be able to select a collection program that is more in-line with your business model.
For example, while some debt collection companies chase debtors for a fixed rate, others will ask you to pay them a certain percentage in commission on every amount that they recover. The second option is well suited for startup and small businesses, allowing them to boost their collections budget.
On the other hand, if a debt is impossible to recover, and you wish to sell it as a bad debt and write it off as a tax loss, you can opt for debt collection companies that can do that for you.
Debt recovery companies generally keep detailed logs of any type of contact they make or have with debtors. These records or information comes in considerably handy when you want to take certain debtors to court.
With in-depth records and documentation, it is will never be hard for your lawyers to make a case against your debtors. This is especially true when you have to prove to the court that you have exhausted all other possible and legal means to recover your outstanding invoices.
Furthermore, their documentation will also be significantly useful when it comes to writing off bad debts as tax losses.
Varied debt recovery strategies and tools
Another great advantage of partnering with a third-party debt collector company is the fact that they will have a plethora of tools and strategies to collect your outstanding accounts. They have the necessary tools and expertise to make the entire process smooth and efficient.
For example, when any of your clients or customers completely fall out of communication with your company – there is no way to reach them – a debt collection company will have the resources needed to track them down through a method known as skip tracing.
Moreover, the agency will also have streamlined access to credit reporting devices, databases for public records, etc. i.e., every essential lead to track down the client.
The bottom line
There is nothing better than to outsource your collections to a reliable and professional agency, which will manage the entire process by keeping you in the loop yet will not waste any of your time.
Moreover, you will also be able to considerably reduce legal risks and will have unprecedented access to expert advice when it comes to cash flow and credit management.
Andrea Bell is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs. You can find her on Twitter:@IM_AndreaBell