By Andrew Kingstone - Updated on June 17, 2021We know Debt collection agencies are a fantastic resource in the fight against late payment and bad debt – after all, we have been around for 25 + years! But unfortunately, age-old barriers and noise about debt collection services continue to exist, preventing many from using our services, often when they need it most!
Here we tackle some debt collection barriers and illustrate that, by utilising the right debt collection agency, you may still get back what you’re owed, and no doubt have been worried about the amount due for some time!
Barrier: It will damage my brand
Reality: The key is finding a debt collection agency that will respect your brand as much as you do – treating it as their own. By introducing a credible debt collection agency as part of your normal credit control process, you can ensure the agency complements and adds value to your in-house collection efforts while using their expertise to help you get paid sooner.
Barrier: It’s costly
Reality: Our debt collection agency works on a success-only basis, so we only get paid once we have collected your debt. This collection fee is in proportion to what we successfully recover. The price of our services is minimal compared to the amount you would lose if you had to write the debt off as uncollectable, and deal with the cash flow implications of it remaining outstanding for longer. Additionally, we are very successful in collecting statutory late payment and interest fees – which also go a long way to covering the costs of collection.
Barrier: It’s only for those debts that are really old
Reality: Research has shown us that the earlier a debt is referred, the more likely it is to be collected. So instead of wasting valuable time chasing debt for months on end in-house using your team, why not hand it over and see if a debt collection agency that has better results? One can even set up an ongoing debt collection facility where the agency will take on any debt once it reaches a certain age albeit 60 or 90 days. This will help to maximise the recovery and remove the time and resource burden on your business.
Barrier: Customers do not like it
Reality: Any good debt collection agency understands that maintaining your customer relationship is extremely important and we take your brand as seriously as you do. Here at Gravity Credit Management, our preference is a polite but firm dialogue when it comes to debt collection, we seek to reaffirm a debtor’s obligation to pay while reinforcing the negative impact, their lack of payment has had on our client. Although it is very true that some might not like the fact that instructions have been given to a debt collection agency, they must remember you have only done so because they have not paid you in the first place. You have after all done what you can, to get what is rightfully yours. Going forward it is also worth considering how valuable a customer they are if they continue to drag the chain on payment!
Barrier: It only works for big companies
Reality: Many small businesses refer their debts to collection agencies every day because they recognise that chasing late payment is not their expertise and a third party is likely to have better results. When you only have a small team it’s unlikely, you’ll have the time or resources to chase late payment without having to neglect key business tasks, but in this instance, you could free up time to concentrate on your business and still get paid.
Barrier: A solicitor is more effective
Reality: The truth is that although the legal system can be useful, it can be very costly and time-consuming. A legal firm is often paid on a time and costs basis whereas a collection agency is paid on success. A credible debt collection agency will prioritise recovering all unpaid sums by working with your customer, preserving your client relationship, before taking the legal avenue and are often resourced with the expertise to do so when the time is right.
Gravity Credit Management is a specialist debt collection agency with more than 25 years of experience. If you need help with debt collection or have questions, please get in touch with us at [email protected] or 0800 GRAVITY.
