Outsourcing of any kind can be hugely beneficial to your business and comes in all forms such as managed IT services, cleaning, and invoicing. But one of the more prolific roles a company tends to outsource is debt collection.
Collections agencies have been around for a long time and can be a huge asset when it comes to recovering any money that is owed to your business. There are multiple benefits of outsourcing to an agency which includes:
- Access to professionals
- Reduced costs
- Better client relationships
Many collections agencies are extremely professional with industry-specific trained staff and most will charge an agreed percentage of the debt recovered. By using an intermediary, you don’t come off as the big bad debt collector so you can continue doing business with a debtor if you wish.
Highly Skilled and Knowledgeable
There are thousands of industries all over the world that specialize in all kinds of things from manufacturing and building to food and technology. As such, there are industry-specific third parties that can manage your debtors such as retail, finance, and even a cannabis collection agency.
Because some of these agencies are trained in a particular industry they understand the needs of your business and the client debtor as well. Legally trained staff are usually used as advisors to enforcement agents who are well versed in the legality of debt recovery, whether it’s payment in full, part, or removal of goods to be sold at auction on your behalf.
Legal staff and skilled negotiators can usually work out a suitable payment method that suits both parties, leaving the debtor in business to work with you in the future while reclaiming anything owed to you. No matter what happens, these agencies can usually reach an amicable outcome for everyone involved.
A Fraction of the Cost
Unless you are a larger business you probably will not have the time and/or resources to own and operate a full-time collections department of your own. Employing educated and trained legal personnel as well as highly paid enforcement and administration staff just isn’t feasible for most companies and even larger organizations choose to outsource their collections issues.
A collections agency will usually charge a small percentage of the debt collected which will be a tiny fraction of what it would cost to employ your own collections staff. A multidisciplinary and interdepartmental strategy, collections is a complex task that requires trained HR, legal, and administration staff.
Companies specializing in collections already have the necessary infrastructure in place that can be deployed at a moment’s notice once you have agreed on a contract with them. As well as staff, such infrastructure also includes complex communication systems for liaising with debtors and clients and secure payment systems that can be used when recovering monies.
Maintain Trust Moving Forward
Many people would be frightened at the prospect of a collections agency turning up at their home or business because when that happens, it means that the final straw has been drawn. This isn’t only scary but can be embarrassing as well, and because of this, collections officers have a bad reputation but the vast majority are extremely professional.
As a business, your primary goal is the acquisition and retention of customers. This is done by sustaining a positive working relationship with any clients, meeting both theirs and your needs with mutual trust.
By liaising with a debtor as an intermediary, the agency takes the brunt of any ill will and keeps you in a better position with the debtor. This means that relationships are easier to maintain and should you wish to put the past behind you and continue business with the debtor, it will be a lot easier in the future.
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