Many companies look to outsource debt collection as part of their credit control procedures. Its part of business survival to improve collection rates, and it should not be a difficult process to outsource debt collection.
We have put together a combination of tips to improve the ease of which you and your business can outsource debt collection, and improve the rates of collection when you find the need to go down this route if you are struggling to get your customers to pay up on time.
Outsource Debt Collection
What you need to have in place to get better cashflow:
- Correct details on the invoice – make sure there are no disputes concerning the invoice before you pass anything over to a debt collection agency. Disputes are the no.1 reason for non-payment.
- Correct contact details – do you have a telephone number, email and correct trading address? Double check all this info before you look to outsource debt collection.
- Negotiate before getting heavy – talk to your customers as much as possible, if it’s a problem with cashflow then try and work with them to come to a repayment arrangement, maybe they can pay an amount every month for a few months. Working with your customers can pay dividends later when the going gets good and they appreciate your leniency in difficult times.
- Keep on top of your top 20% of customers – it’s the 80/20 rule, your top 20% of customers usually account for 80% of your turnover and you should focus on these as priority collections for the health of your business cashflow.
- Don’t delay if they stop responding – be fast to act when your customers stop talking to you because the longer you leave it the more difficult it is to collect (i.e they could change address/ transfer assets/ liquidate).
So these are just a few techniques you can look at before you think about how you might outsource debt collection.
The most basic principle is that cashflow is king and without a healthy position, your business can only prosper by getting paid on time.
It is our passion that you are paid and our clients are very happy with our services. If you are struggling to collect debt and want to outsource debt collection please don’t hestate to give us a call on 01332 565 350 or email firstname.lastname@example.org