When’s The Right Time To Use A Debt Collector?

Overdue payments can be a business owners worst nightmare. Depending on your cashflow and invoice terms one late invoice can range from a minor inconvenience to a significant financial problem. And while you may be able to handle some clients on your own, there may also be times when you could benefit from a little extra help. This is where having a debt collector on your side can be a really useful thing. If you’re considering hiring a debt collector, here and a few signs that might mean it’s time to make the call.

Your Internal Resources Aren’t Enough

For smaller businesses with only a few employees it can be tough to find the time to chase overdue invoices. Even in bigger companies, resources can be thin on the ground in the accounts department, and the last thing you want is to have valuable employees tied up with phone calls and emails about invoices. On top of that, debt collection is a skill that not everyone has, so you may not even have the resources in house to do it efficiently. If this is the case, it can be helpful to bring in a debt collector for extra support. A debt collection agency can free up your own internal resources while making sure your overdue invoices are handled in the best way possible.

You Haven’t Been Successful

Most businesses prefer to at least start the debt collection process themselves. The first few, more informal contacts to check that everything is OK and potentially come up with a payment plan if the intent is good are usually better done internally, by someone who has a relationship with the client. But sometimes that approach doesn’t work, and the invoice still goes unpaid. Debt collection agencies have extensive experience in handling this sort of thing, and can often have more success than an internal team. In fact, sometimes just the involvement of a third party is enough to prompt payment from some customers.

You Can’t Contact The Customer

Sometimes a customer will try their best to avoid paying your invoice. They may dodge your attempts to contact them, or appear to just disappear off the face of the earth. If you’re struggling to reach your customer, a debt collector will be your best friend. Debt collectors have a wide range of resources and networks available to them to track down even the most evasive client. And once they’ve found your customer, they’ll know exactly the right approach to take to get the invoice paid.

There’s A Dispute

Disputes are one of the most common reasons for invoices going unpaid, especially in smaller businesses. They may have a genuine complaint with your business, there may be a misunderstanding, or they may be denying responsibility for the invoice via dispute. Whatever the reason, third party mediation can be incredibly helpful in moving things forward. A debt collector can help you gain visibility on why the invoice is being disputed, and help to come to an agreement.

Of course, every debt needs to be assessed individually and handled with care. But it’s important to remember that the longer you wait to call a debt collection agency, the more challenging it becomes to successfully recover the debt. If you would like help with reclaiming money owed to you, or you have questions about our process, we would love to help. Please just get in touch with the team today.