29% of small businesses fail as a result of cash flow issues. These issues are exacerbated by unpaid invoices and a lack of effective small business debt collection techniques.
Some business owners underestimate the importance of business debt collection. So, instead of receiving their due obligations, they are stuck with thousands of dollars of lost income.
In this article, we discuss the benefits of debt collection and when to seek out debt collection services. Continue reading if you want to contribute to your small business’s success.
1. More Than One Customer Has an Unpaid Bill
While having one customer with an overdue account is frustrating, having multiple is even worse. Your business may have sent statements and made several different attempts at contact, but your clients still aren’t paying.
The more this list of non-paying clients grows, the more difficult it is to manage. Getting ahead of the game with small business debt collection can help you avoid feeling overwhelmed later on.
2. Your List of Overdue Accounts Is Long
Some small businesses may have let their overdue accounts build up or are unaware of how bad the situation really is. This can be enough to cause any entrepreneur to panic.
However, a long list of overdue accounts doesn’t have to be a cause for panic. A small business debt collection agency is prepared to handle these long lists so you don’t have to. It’s one less thing for you to worry about.
3. You Aren’t Staffed for Small Business Debt Collection
As a small business, you may not have the same resources as a debt collection agency in terms of staffing. You may not be able to sacrifice help in other departments in order to track down customers that owe you money.
Likewise, you may not have enough work or funds to bring on an employee solely for the purposes of debt collection services. However, this doesn’t mean you can’t manage your business’s debt collection.
This is one of the benefits of debt collection. They have the necessary resources and staff to track down your money for you. This means you don’t have to make sacrifices in other areas of your business.
4. Your Debt Collection Attempts Have Been Unsuccessful
Companies that have the staff to spare for business debt collection may still be unable to get the money they’re owed. This can be due to a lack of resources, an overwhelming number of overdue accounts, or a lack of knowledge in debt collection.
If your company is making attempts to collect payments, but these attempts are reaping rewards, then it’s time to consider working with a debt collection agency.
One of the benefits of debt collection is it can also provide professional credit management advice. It can help them gain the information and support they need to resolve their debt.
5. You Can’t Contact Those with Unpaid Obligations
Some customers with overdue accounts seem to disappear. Their voicemail may be full, their numbers out of service, and/or your bills are returned to you due to a wrong address.
Being unable to contact those with unpaid obligations may not mean you’re out the money you’re owed. It just means it’s time to contact debt collection services that have the skill and resources to track down these hard-to-reach clients.
6. Your Customers Are From Different Areas
When customers are spread through different areas, it can be more difficult to reach them than if they were located in your immediate area. Plus, different states may have different debt collection laws.
Instead of having to do your research on what you can and can’t do to collect your due obligations, you can leave the work to a small business debt collection agency.
7. Some Bills are Long Overdue
Identifying overdue accounts quickly is essential for small businesses. The longer overdue bills sit, the more money your business loses on them.
Bills that are over 90 days past due require the expertise of a small business debt collection agency to minimize your losses. A debt collection agency can keep up with debt collection and work toward settling accounts in a timely fashion.
8. You Find Debt Collection Laws Confusing
Debt collection laws differ by state. Plus, these laws change and are heavily regulated thanks to the Fair Debt Collection Practices Act (FDCPA).
Not knowing the intricacies of these laws could mean potentially facing a lawsuit for improper debt collection.
This also means you’ll end up paying more money on top of not receiving your due compensation. A debt collection agency knows the intricacies of debt collection laws, which minimizes the risks associated with pursuing debt collection.
9. Your Business Needs Cash Flow
A lack of cash flow is one of the main reasons small businesses fail. A long list of past due accounts contributes to a business’s cash flow issues.
Working with a small business debt collection agency can help you minimize your cash flow issues by providing necessary advice as well as collecting overdue debts. This can contribute to the success of your business.
10. You Need Effective Documentation
An important part of debt collection is proper documentation. This helps ensure your business is protected in the event a client attempts to sue you for attempts to collect. Likewise, it helps support your case in the event you need to sue for due obligations.
Effective documentation is also required if a debt write-off is necessary. Debt collection services maintain proper documentation every step of the way to protect you and your business.
Find the Right Small Business Debt Collection Service
Finding the right debt collection is an important factor in successfully collecting on past-due bills. The best debt collection agencies have years of experience, high annual recovery rates, and satisfied customers.
Get Started With Small Business Debt Collection
The key to small business debt collection is getting ahead before you get overwhelmed. Past due financial obligations can build up quickly and affect your business’s cash flow.
However, falling behind on debt collection doesn’t mean you need to write off overdue bills as a loss. Instead, you can work with debt collection services with a proven track record in successful collection.
If your business is in need of small business debt collection support, contact us today to get started.