Running a business means managing multiple moving parts. But what happens when a customer won’t pay for a product or service? It’s a drain on a company’s resources and time, and turning over unpaid debt to a collection agency should be a consideration. Having all of the information is an important first step. To help, Business & Professional Collection Service is sharing the pros and cons of hiring a collection agency.
The Benefit of a Third Party
By turning over outstanding debt to a professional collection agency, your business is no longer directly involved, freeing you up to focus on your company. Plus, the right agency understands how to preserve valuable customer relationships. Adopting a company policy for sending unpaid accounts to collections gives you the benefit of a third party that handles a challenging reality of doing business — and it does so in a way that’s professional and compliant.
A Greater Chance of Recovery
Because debt collectors are in the business of collecting debt, they have access to a range of tools and strategies that maximize a company’s chance of recovery. A professional agency like BPCS knows how to collect on unpaid debt while staying compliant. In many cases, even initial correspondence from a collection agency can be enough to motivate consumers to pay. The chances of recovery are almost always greater when a business involves a collection agency.
A Better Use of Resources
For a business, chasing unpaid debt means composing and mailing collection letter, making phone calls, and tracking the status of unpaid accounts. If your company is juggling multiple past-due accounts, it can be a big drain on time. While BPCS does recommend that a business sends initial correspondence, it’s also true that further attempts will be unsuccessful if a customer is continually unresponsive to previous correspondence. In that case, passing delinquent accounts to an agency means you can return your focus to your business.
Partnering with a collection agency isn’t free, but keep in mind that money collected via an agency is money you likely wouldn’t have otherwise seen. Another potential drawback relates to maintaining customer relationships. While a professional collection agency understands the delicate nature inherent to collecting unpaid debt without damaging a company’s relationship with the customer, there are no guarantees. Some customers may react poorly to having their account turned over, and there’s not much to be done to change that.
The Most Important Consideration
Choosing the right collection agency increases your chances of success, both in terms of debt recovery and preserved relationships with customers. Find a trustworthy, compliant agency with demonstrated success in your industry. Something is better than nothing, and your chances of collecting on unpaid debt significantly increase when you work with a professional.
Learn more about debt recovery strategies at Business and Professional Collection Services. Contact us today.