With costs increasing regularly, American businesses struggle with a major problem – rising consumer debt. More Americans owe on credit cards, auto loans, student loans, and personal loans. What’s more, mortgage debt is the highest it’s been since the last housing market drop off.
Alarmingly, many Americans are struggling to pay credit card bills as well. Joe Resendiz, an analyst with Value Penguin noted that the credit card default numbers rose for Bank of America in the last quarter of 2018: “I would say that credit card defaults are definitely a cause for concern.”
With these trends in mind, as a business owner, you’re more likely to struggle to clear your outstanding A/R unless you adapt.
Certainly, these tips help you collect more of your money by advising you on how to negotiate obstacles like outdated contact information, language barriers, unwilling debtors and more. You can make your accounts receivable department more effective with the following changes.
- Hire a dedicated accountant who can chase down debtors, resolve discrepancies, and verify payments. Good luck finding one though, since they’re all working at one of the most effective debt collection agencies around, Summit A*R!
- Buy the latest accounting software that helps you manage delinquent accounts. Keep in mind that these programs are expensive and difficult to master.
- Incentivize timely payments by penalizing late payers.
- Offer as many payment options as possible.
- Ask for deposits to protect your cash flow.
- Learn about the Five C’s of Credit so you can better screen potential debtors in order to improve your cash flow.
While these methods may help, at Summit A*R we feel that your best bet is to partner with a debt collection agency. Here are a few reasons why.
#1 It Will Save You Time
Chasing debts is time-consuming. Trust us on this, we do it for a living. From tracing customers and their assets through databases to contacting them via phone and email to convincing them to make payments, it’s a full-time job.
As a business owner, you have enough concerns. From satisfying customers to paying fixed and variable costs to expanding your enterprise, you only wish that there were two of you. That’s why you need to use a debt collection agency, so you have more time to maximize your revenue. Click here to learn more about our commercial collection solutions – we’ve been in the business for 23 years and are staffed by a team of highly skilled and experienced professionals.
#2 It Will Save You Money
It’s not cheap to run an in-house collections department, especially if you’re a smaller business. To start with, you may not have enough debtors to justify hiring a full-time employee dedicated to collections. What’s more, it’ll cost even more to chase a hard-to-find debtor when you’re forced to outsource to a private investigator.
At Summit A*R we have a dedicated skip tracing department with a private investigator and access to many databases that you won’t. We’re also better at finding people than our competitors because we have skip tracing down to an art form.
We’re also affordable. Our contingency fees are reasonable, and we only get paid when you get paid. And unlike other collection agencies, we don’t have minimum quotas, nor do we demand anything up front. This makes it easier for you to test our services.
#3 Debt Collectors Are More Effective
If your debtor just doesn’t want to pay, then you’ll find it difficult to recover your revenue.
At Summit A*R we boast a recovery rate that’s twice the industry average in most cases. This is because we use our resources, expertise, and negotiation skills to coax a delinquent customer into paying what they owe.
You may have heard that some debt collection agencies use dirty tactics. This can include threats, harassment, and other shady behaviors. Just recently, JPMorgan Chase was ordered to pay a settlement of $166 million for engaging in illegal debt collection activities for years.
At Summit A*R, our philosophy is to treat every person with dignity and respect yet achieve results too. Through our “P.H.D. Philosophy” (Preserve Human Dignity), we bring diplomacy back to commercial debt collection. It works because debtors respond better when treated with humanity.
We believe that when confronted with a respectful yet stern attitude, most debtors want to pay. And they certainly do, when presented with manageable payment options.
The proof is in our associations. We are proud to partner with some of the most reputable debt collection organizations in the world that promote ethical debt collection values. What’s more, we have an A+ rating from the Better Business Bureau (BBB).
Unfortunately, some consumers don’t want to pay and refuse to negotiate terms with us. Here, we can report them to the top three credit bureaus in the country. Statistics prove that most debtors are willing to pay when their credit rating is at risk. Unlike your in-house collections department, we have the capability to report debtors.
Most businesses tend to write off debt if the customer is stubborn and don’t consider litigation because of the expenses involved. At Summit A*R we can use legal action with your consent to chase your missing revenue after performing a cost-reward analysis.
#4 Legal Protection
If your former customer feels that their rights were violated, they may sue your collections department. This would be a nightmare scenario for a small business. On the other hand, you’re better protected when outsourcing to a debt collection agency.
The Federal Trade Commission (FTC) has outlined several laws in its Fair Debt Collection Practices Act to protect consumers in debt. Debt collectors who’ve broken these rules have been banned from practicing. A good debt collection agency like ours is aware of these regulations and strives to operate on the right side of the law.
#5 Some Agencies Offer Pre-Collection Services
If collecting payments is too stressful, then you can outsource entirely to Summit A*R. We will represent you professionally, with a focus on customer service. So, get in touch with us today. Leave collections to the professionals so that you have more time to strengthen your business.