If you are wondering why to use a collection agency, here are a few reasons.
Dealing with overdue accounts and slow payments can significantly impact a business, often leading to cash flow issues that contribute to 82% of businesses’ failure, as per a U.S. Bank study. Considering these challenges, it begs the question: Why wouldn’t you enlist the help of a professional debt collection agency? This article will explore several compelling reasons why hiring a reliable debt collection agency is crucial for effectively managing your accounts receivables.
Reasons to Hire a Debt Collection Agency:
- Legal Protection: Collecting bad debts involves navigating complex laws and regulations that vary from state to state. Debtors are not hesitant to take legal action if they suspect any violations. Debt collection agencies possess in-depth knowledge of these laws at the state and federal levels. By hiring an agency well-versed in the specific regulations of your collection jurisdiction, you can mitigate legal risks associated with debt collection.
- Efficiency: Engaging a debt collection agency can significantly reduce legal costs as these agencies have well-established systems for handling collections. They utilize advanced tools like skip tracing and credit history analysis to expedite the process while improving cash flow. A reputable agency also has a proven track record of quickly resolving debts. Most agencies operate on a contingency fee basis, meaning you only pay if they successfully collect.
- Advice: One invaluable advantage of hiring a collection agency is gaining access to its expertise in credit management. These agencies specialize in this field and can provide valuable advice and consulting services to help you better manage your credit processes.
- Increase Cash Flow: Cash flow problems are a leading cause of business failure. Collection agencies offer credit management services that can enhance your cash flow and ensure its steady flow. By promptly turning over debts to the agency, you can expedite the return of funds to your business.
- Documentation: Collection agencies maintain meticulous records and documents of their interactions with debtors. These records become vital, particularly when legal action becomes necessary. Furthermore, if you need to write off bad debts, the agency will have the necessary documentation to support your claim.
- Skip Tracing: Leading collection agencies employ a sophisticated technique known as “skip tracing.” This process involves locating debtors who have evaded contact or skipped town, hence the term “skip tracing.” Having access to skip-tracing software is crucial for successful debt recovery. It proves especially helpful in cases where debtors have been unresponsive to calls, emails, and letters.
- Shifting Focus: By entrusting debtors to a collection agency, you can redirect your attention to what you excel at, saving valuable time and resources. It allows you to focus on your core business activities while leaving the debt recovery process in the hands of professionals. Remember, when selecting a collection agency, it’s essential to consider its reputation, expertise, and track record. Research agencies through resources like the Better Business Bureau to ensure their reliability and rating before making a decision.
In this article, we discussed the importance of hiring a reliable debt collection agency to manage overdue accounts and slow pay in business. We highlighted several reasons to consider hiring us as your debt collection agency, including legal protection, efficiency in reducing costs and speeding up the collection process, access to expert advice and credit management services, increased cash flow, proper documentation for legal action or write-offs, the use of skip tracing to locate elusive debtors, and the ability to refocus on core business activities. The article emphasized the need for thorough research and due diligence when selecting a collection agency to ensure your credibility and reputation.
MCA is a third-party debt collection agency that has been in constant business since 1950. We are rated A+ with the Better Business Bureau and we pride ourselves on excellent customer service along with delivering great recovery rates. There is no cost to you unless we collect it! Why not try and re-coop some of your past due accounts with no out-of-pocket expense?