Did you know that the longer you wait to get a debt resolved, the less likely you'll get the total amount owed to you?
It can be worrisome to consider letting another company handle a client relationship or an account that's gone way past due. The truth is, worrying about it is costing you money. You're reading this because you have questions that need answers. First and foremost...
When growing a business, organized finances, documented processes and the perfect staff can contribute to positive feedback and referrals from clients. Even when everything is going right, there will be that one particular client who seemingly steals your joy. Whether they're being difficult or too demanding (hello scope creep), it's imperative to set boundaries on the B2B relationship. When they don't pay their invoices, it could be even more frustrating.
Working capital and cash flow is imperative to any successful business. Accounts receivable management can help ensure access to cash through a consistent credit, invoicing and collections process. Business-to-business, or B2B, collections is different from consumer collections and the procedures for collection must be handled differently as well.
An effective B2B collections process will elicit more working capital and improve cash flow. Here's how...
If you're reading this, you may be wondering why the title suggests you should hire a commercial collection agency right now. Let's start by considering the reasons why you shouldn't:
Feel free to click away if you've said "yes" to all three. Otherwise, read on.
Small businesses balance on a precarious line when attempting to collect debts from their customers. Business owners trying to grow their business certainly don't want to lose customers. If those same customers don't pay their balances on time, or at all, it hurts the business even more because time and resources are already spent. Depending on the type of small business customers, there is a right way and a wrong way to do debt collection.
When your accounts receivable department could use some help, it will show up in a number of ways. You may notice your sales are increasing but your cash flow isn't covering your bills. Bad debts are written off or your DSO keeps increasing. To grow your business, especially if you want investors, you must make accounts receivable a priority, collect bad debt, and use legal action to collect what's owed to you.
When clients aren't paying their invoices on time or at all, many businesses will write it off as bad debt simply because of the resources involved with collections. Some business owners are concerned about using a commercial debt collections agency because of the cost or complexity. There may also be apprehension due to mistrust of proper handling the client relationship. Depending on the agency, commercial debt collections doesn't have to be complex or costly.
Here's how your business can send commercial customer accounts to collections.
Trying to find the best collections agency for your business can be a challenge. It would be nice if your business clients would pay on-time for the services or products you've already supplied. The relationships with those clients are still important and you don't want to break those ties with a court battle.
Dealing with past due accounts or non-responsive clients is frustrating enough. Business owners wonder what options they have but don't have the time to do much research. Is it time to reach out again? Go to small claims court? Write the whole thing off?
Business suppliers, vendors, distributors and manufacturers typically have their own industry jargon. There's an expectation among those who "speak the language" that in a business relationship, you'll have a solid comprehension of how that industry works. Debt collections is no different. Businesses seeking to recover past due accounts receivables will search for debt collection agencies they can trust, who comprehend their industry specifics and who also speak their language.
