Collection Agencies
Collecting debts can be a difficult and time consuming task for many small to medium sized businesses. In January 2008, the media reported that the amount owed to British small and medium sized businesses stood at £18.6 billion, an increase of £2.6 billion on the figures for 2007. As a consequence, approximately one fifth of companies were forced to employ someone solely to collect the outstanding amounts and it has been estimated that a company loses an average of 17 days each year chasing their debts.
Unfortunately the economic conditions are such that this is only likely to get worse as we move further into recession. Already we are seeing spiralling insolvencies and businesses reporting cash flow problems. The businesses most likely to come through the recession are those with effective credit management policies and those which are more adept at chasing outstanding payments.
Collecting debts from your customers
Your customers will normally fall into a number of different categories, some may be having financial problems;, some may have simply misplaced or forgotten about your invoice; whereas others may be deliberately avoiding payment. Being able to determine which category your customer may fall into is the key to both maximising the collection of outstanding invoices and maintaining valuable client relationships throughout the collection process.
A collection agency is experienced at recognising the customer groups and applying tried and tested collections strategies to each. This is a skill which is becoming increasingly important given the rising number of debts.
Where to start
To begin with, your business needs to ensure that it has firm and effective credit management policies to ensure that any exposure to bad debts is minimised. We have produced a simple downloadable guide “7 ways to reduce your business’s debts” which outlines the things a business should consider when putting in place an effective credit management strategy.
Inevitably however, at some point most businesses will be forced to deal with collecting outstanding payments from their existing customers. Many businesses may be facing this situation for the first time and may lack either the skills or resources to chase their debts effectively. Outsourcing this work to a collections agency which specialises in this type of work, will allow the credit department to focus on other areas of the business.
Collection Agencies – there are differences
The Intrum Justitia brand is recognised throughout the world as a leader in credit management services. We help over 90,000 clients improve their cash flow and long term profitability. These clients range from large multi-national businesses through to small privately owned companies, all unique and all demanding that equal attention be paid to the collection of their outstanding receivables.
With a client base this varied, we understand that the clients we work for and their customers differ. As a result, the collection campaigns we run encompass a variety of the most effective contact techniques combined with self serve web capability and one of the widest range of payment methods available. Contact strategies include letters, telephone calls, SMS, e-mail etc. depending upon the appropriateness of each. If your customers are proving difficult to locate or have moved, we can also provide a tracing facility, and should it be necessary, legal action can also be taken if authorised by the client.
Finally, our collections centre is divided into client and sector specific teams. This ensures that the teams develop a much better understanding of both the clients they work for and the sectors in which they operate, thus aiding collections performance.
For further information regarding our debt collection service, please go to On Demand Collections or call us on 0870 414 0044.
