Improve revenue recovery with a collection agency.
It doesn’t matter the size or type of the business; outsourcing your past due receivables to a professional collection agency is always more effective than a do-it-yourself approach. Collections is one of the most highly regulated and complex business functions, requiring an understanding of legal concepts, the right technology, and the ability to maintain a positive relationship with customers.
The focus of this post will share crucial reasons why partnering with a professional collection agency yields strong ROI for companies struggling with accounts receivables.
Can a Collection Agency Help Your Business?
“The U.S. economy is heavily reliant on credit, and consumers depend on the availability of credit to access a range of goods and services from health care and education to automobiles and home loans. To support this credit economy, the debt collection industry serves a vital role recovering outstanding debts owed to creditors and service providers.”
ACA International white paper
The truth is that sometimes customers can be unreliable. Collecting payment from a past due account requires finesse, which might be difficult for the business owner with a lot more than past due A/R on their mind.
Collecting debt is a time-consuming process that usually includes multiple steps, which is something that most business owners simply don’t have time for. Enterprise organizations attempting collections in-house can struggle with the same issues that small- to mid-sized businesses do. Employees with time constraints, a lack of knowledge about the latest regulatory rules, and technology that is less than state-of-the-art, can all present challenges that can thwart your best efforts at in-house collections.
When in-house collections fail, it’s time to hire the professionals.
So, can a collection agency help your business? The answer is a resounding, “Yes.” Here are four crucial ways a professional collection agency can improve your bottom line by collecting what’s owed to your company:
- A collection agency helps protect your company from running afoul of ever-changing regulatory requirements. These rules cover your contact with past due clients at every interaction, from the first letter to the last call. These laws are sometimes different at the local, state, and federal level, and they’re constantly changing. If your team doesn’t have time to conduct collections, how do they have time to stay on top of changes to collection rules?
- The longer an account sits in the past due bucket, the harder it may be to collect on. While most businesses fail at collecting on aged A/R, the professional collection agency actually has a decent return on these accounts.
- The collection agency saves businesses time, freeing up internal resources for other tasks. Since these firms have technology designed specifically to analyze and optimize the debt recovery process, there are improved economies of scale when hiring these companies.
- A collection agency can help maintain your reputation in the market. With a collection agency, consumers have the option to set up a payment plan or negotiate for a percentage of what’s owed. A collection agency can do this in a way that maintains the customer relationship while recovering what’s owed.
Making collections a priority means recognizing that in-house collection efforts aren’t nearly as effective as hiring a professional. Contact TSI and explore your revenue recovery options. To learn more about how to optimize your revenue, contact us.
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