When you’re running a company of any type and end up facing a situation where someone owes money to your business, you can’t ignore this problem. Financial losses due to lost income can put any company at risk, but the situation is especially challenging in the construction industry, where services can cost significant amounts of money.
While there are several ways that you might consider resolving this problem, there’s none as effective as employing the resources of a collection specialist. Rather than making matters worse, contact us at Summit A•R.
Two Mistakes and One Solution
The risk of putting the financial stability of your company at risk should be reason enough for any business owner to want to contact a professional who can resolve the situation quickly. However, it is often the same threat of financial burden that prevents business owners from being willing to seek help from a collection agency to relieve the pressure.
To demonstrate the inherent risk involved in this situation, the example of three different ways that the owner of a construction company might consider dealing with the problem of losing income because of a client that cannot pay or refuses to do so.
Wait for the Problem to Resolve Itself
The first choice that a construction business owner might consider is to ignore the problem. After all, if you continue to do more work, you might be able to earn enough money to cover the loss, right? While this choice may seem to work for a short while, anyone familiar with the construction industry knows that a good deal of the work generated occurs based on reputation and recommendation spread by word of mouth.
While positive things about your company and the fine work you can accomplish will quickly spread to your other clients, things you don’t want them to hear are likely to spread as well. The more your clients catch wind of the fact that someone was able to cheat you out of payment, the more you’ll be putting yourself at risk of being taken advantage of by another client.
You may be able to withstand lost income from one or two clients. Still, you won’t be able to withstand a trend of similar instances without the intervention of a commercial collection services professional. In such a scenario, it eventually becomes clear that no construction company can afford to ignore lost income because it is not a situation that can be ignored.
How Loss of Income Can Impact Your Business
No company can afford to provide the goods or services they offer without getting payment in return. When you’re running a company and expect payment from your clients or business partners, but that payment never arrives, the situation can get dire.
When construction company owners forego the benefits of working with a collection agency, the situation usually goes from bad to worse. Eventually, lost income will result in your inability to pay bills your own company owes, putting your company deeply in jeopardy.
How Lost Income Can Impact You
By far, the most significant impact that lost income has on a company is the threat that it won’t be able to survive. However, that’s not the only way that losing money can impact a business owner. The attempt to track down delinquent clients is a significant distraction that has a negative effect on your ability to focus at work.
While choosing the right collection agency will ensure that you are immediately relieved of the burdens associated with lost income, failing to do so can cause you to feel a number of debilitating psychological reactions, such as:
Although business owners are not to blame when clients refuse to pay, they often experience the strain of emotions like anxiety and guilt linked to the instability the financial situation brings. Unfortunately, this often results in the business owner or manager resorting to yet another misplaced attempt to collect unpaid debt.
Try to Resolve the Issue Yourself
When a business owner attempts to collect debts from a delinquent client, they are usually unsuccessful. Debt resolution is a challenging task that requires the training and experience of a professional.
In cases where a professional debt resolution expert could easily have collected the unpaid debt, business owners often achieve the opposite outcome from the one they are desperate to achieve. For example, where a qualified debt resolution agent can maintain business relationships between owner and client, those who employ unethical tactics eliminate this possibility.
Likewise, those who try to remedy the situation on their own usually only make the problem worse. For example, when the owner of a construction company confronts the delinquent in question with unethical collection tactics, like harassment or intimidation, they risk breaking the laws regarding debt collection. Such actions could eliminate further legal recourse against that client.
In such cases, a collection agency will usually need to employ skip tracing solutions to track down the delinquent in question. Establishing a cooperative and friendly path of communication becomes increasingly challenging as well.
Contact a Debt Collection Agency
Eventually, most business owners who have wasted their time by either attempting to ignore the problem or attempting to resolve it on their own realize that they need the help of a collection agency. It should be alarmingly clear by now that the risks of failing to seek out help in collecting unpaid debts often become much greater than the cost of the lost income itself.
If you want to prevent facing legal issues of your own, jeopardizing the reputation of your construction business, and issues associated with the emotional burden of losing out on income for services rendered, contact a collection agency when you’re facing delinquent clients.
If you’re the owner of a construction company, and you’re looking to collect an unpaid debt that’s owed to your business, do not hesitate to get in touch with us at Summit A•R. It may be the best decision you’ve made for the success of your business.