When to Hire a Debt Collection Agency

There are many methods utilised by a debt collection agency such as phone calls, sending letters and emails. But this can become impossible if the clients change their phone numbers and other contact details. Therefore, many debt collection agencies use skip tracing and other technology to track customers down.

It can be difficult for a creditor to collect on unpaid payments as this is something that can take a good portion of their time; time that could otherwise be spent on furthering the growth of the company. It is a lot easier to outsource this to a debt collection agency especially if you have exhausted all other avenues of debt collection such as trying to contact the client and trying to create a payment plan. Writing off the debts is one of the options available for you but if you are a small business, this can damage your cash flow significantly. In this case, you can hire small business debt recovery Gold Coast to pursue debtors. You will generally not pay for the services of a debt collection agency until they recover a debt. But the pricing structure of different companies will be different so you need to check with a few different companies to see which suits your business structure the best.

There is a window of time when you can contact the client and if they are amenable, agree to a payment plan and collect on the debt. But with time, it can become a lot harder to collect and many collection agencies also have a higher commission for late stage debts. If your attempt at collection has failed for 2 to 3 months, it is best to hand over the account to a debt collection agency. Having late payments can be a significant blow to your cash flow and if you are not able to write off the debt, collecting it through a collection agency will be the best solution. Most of the time, even if you are able to contact the client, they may give excuses and renege on their promises to pay. Some clients tend to ignore calls completely and turn a deaf ear to your requests and further attempts to contact them will only waste more of your valuable time. So turning the account over to the debt collection agency will ensure you have a more favourable result.

Sometimes the customer will be willing to pay but will not have the means to do it. And persisting in getting them to pay will not give you any results. And further attempts can also damage your relationship with the customer. In this situation, you can hire a collection agency to be a neutral party so that they can come to an agreement with the customer without putting undue stress on your company. There are several precautions you can take to ensure that you get paid on time. You need to have clear invoice payment terms so that the client understands the full amount as well as the time duration within they have to pay. You also need to specify any consequences for late payments.