Sometimes, it can be difficult to collect money from individuals or businesses that owe you. Handling your accounts receivables in-house can turn your focus away from your organization’s core competencies, but outsourcing this process can help you increase revenue as well as maximize productivity. Here are five reasons why you should outsource your debt collection transactions.
1. Cost
Why invest hundreds of thousands of dollars in training and housing an internal collection department when you can let the pros do it for less? Collection agencies have been in the industry for longer so they know how best to deal with debtors and collect funds quickly. Some agencies even provide customer care services, which indicates quality and professionalism.
2. Focus
It’s hard to pay attention to your business’s day-to-day operations and marketing when you have to deal with your accounts receivables as well. Outsourcing your company’s debt collection allows you to do what you do best. And when you focus on the more important aspects of your business, you can boost your productivity and find new sources of income, thereby increasing your revenue.
3. Qualifications
A reputable collection agency is capable of doing the job well for you, so you don’t have to concentrate on training in-house staff. Several agencies give their employees a small base pay plus a commission that is based on the amount they collect. This gives their staff motivation to work hard to track your debtors down and reduce delinquency rates.
4. Industry Practices
Legitimate collection agencies follow certain laws and regulations. Carrying out unethical or improper collection techniques can lead to costly lawsuits which will only make things worse, so leave the work to an agency that is familiar with the legal side of dealing with debtors.
5. Currency
Because debt collection laws and regulations change frequently, it is important to stay in the loop when it comes to federal law amendments regarding debt collection and recovery. Outsourcing your accounts receivables to a collection agency will ensure that all transactions are performed in accordance with the latest laws and regulations, and any techniques that are of questionable legality are avoided.