Here we tried to explain 6 debt collection myths that always confuses small organizations or start-ups or MSMEs. We showed that by engaging the right debt collection agency, you could still get back your money what you’re owed.
Myth: It’s expensive to hire a recovery agency?
Reality: No, It is not that expensive. Most of the debt collection agencies work on a success-only basis so they will be paid only if they have collected your debt amount. The price you will pay for their services will be minimum as compared to the amount you would lose if you had to write-off the debt as uncollectable.
Myth: Customers won’t like to introduce a third party?
Reality: A good debt collector understands that maintaining your relationships with your customers is extremely important and will take good care of your brand as seriously as you do. Here at Recreate Credit & Collections, our preference is a polite negotiation when it comes to a debt collection, just by reminding them to pay their debt amount while explaining the adverse impact their tardiness will have on our client. Although some might not like the fact that you’ve instructed to a debt collection agency, but you’ve only done so because they haven’t paid you in the first place. You’re perfectly within your rights to do so what’s rightful to you, while it’s also worth considering how valuable a customer they are if they aren’t going to pay you.
Myth: It’s only for big organizations?Really!
Reality: Thousands of small businesses,organizations and MSMEs refers to debt collection agencies every day because they understand that chasing the late payments or debts is not their expertise and a third party will provide better results to them. When you only have a small team, it’s unlikely you’ll have enough time and resources to chase your late payments, debts, and defaulters without neglecting your key business tasks,but outsourcing an expert to your organization for credit control, you could easily free up extra time to concentrate on your business and still get paid.
Myth: It’s only for past debts?
Reality: Researches shows that the earlier a debt is referred, the more likely it is to be collected. So instead of wasting your valuable time on chasing a debt for months on end in-house, why not hand it over to an expert in this and see if a collector has better results? You can even set up an ongoing debt collection facility where the agency will take on any debt which reaches a certain age. This helps to maximise their debt recovery and remove the time and resource burden on your own business.
Myth: A counsellor is more effective, how much?
Reality: Although there is always a time and place for the legal systems to get involved in but the truth is that it can be very costly and time-consuming. A good debt collector will be able to recover the unpaid amounts before having to take the legal actions, thus avoiding any unnecessary costs and stress, but have the expertise to do so when the time is right.
Myth: It will damage my brand value?
Reality: The point is finding a debt collector that will respect your brand as much as you do. Also, by introducing a debt collection agency as part of the normal credit-control process you can ensure that the agency will take good care of your relationship with your customers and the efforts while putting pressure on your debtors to get paid sooner.