Almost all companies deal with delinquent accounts. Not managing them correctly can put a burden on your operations and make it difficult to grow. Utilizing internal resources to follow up on these accounts in a timely fashion can be challenging. In most cases, companies lack the right amount of staff and technology to consistently follow up early and often enough to maximize the recoupment of their delinquent accounts. Utilizing an external agency to assist with receivables and charged-off balances is a great way to overcome these obstacles and improve your collection rate.
Here are just some of the many reasons why you should use a Collection Agency to assist you with your collecting efforts.
Reasons to Hire a Collection Agency
1. Recover Early
On average, companies have a 50% chance of collecting overdue bills when they are less than 90 days old and those chances drop significantly the longer they wait. Putting off delinquent accounts due to a lack of resources or not prioritizing them early enough will have a serious negative impact on your bottom line. Hiring a Collection Agency will ensure you dedicate the appropriate amount of effort at the right time to recover early.
2. Expert Tools
When a business tries to collect a debt independently, it may lack the technology and expertise to do it effectively. Collection Agencies offer more complex collection capabilities, such as skip-tracing which helps to identify people’s whereabouts, and data modeling to prioritize accounts and optimize contact rates. A competent Collection Agency like First Credit Services utilizes these tools to help settle debts quicker at a much lower cost.
3. Boost Your Cash Flow
The most common reason for a company’s failure is a lack of cash flow. For a business to be successful, it must have sufficient cash at all times to help pay for expenses like labor, bank loans, supplies, and taxes. But delinquencies and bad debt can halt a business’ ability to cover those expenses. First-Party and Third-Party Collections Services provided by agencies like First Credit Service can help reduce outstanding receivables at a higher rate than most internal processes and significantly increase cash flow.
All delinquent accounts are not the same and not accounting for the differences will hinder recovery rates. An experienced Collection Agency like First Credit Services will know the different industry nuances (Automotive finance, consumer loans, health and fitness, etc) when it comes to receivables. A good agency will work with its clients to bring those differences to light and create a customized collections strategy.
5. Legal Protection
The debt collecting industry is heavily governed by Federal and State laws and regulations. Collection agencies, like First Credit Services, are well-versed in all collection laws and regulations. Utilizing their services will help you avoid falling into the legal pitfalls of trying to collect the debt on your own. They have a dedicated compliance team that strictly monitors all laws and ensures collection practices are always compliant, minimizing your risk and protecting your brand.
Dealing with debtors can be time-consuming and difficult. Moreover, it can suffocate your business operations by depleting your resources and potentially opening you up to legal issues. Therefore, outsourcing your collection activities to an experienced Debt Collection Agency is a smart alternative.
First Credit Services, which has 25 years of compliant collections experience is a good fit for companies in most industries. They offer a variety of services, including First Party and Third Party Collections. In addition, they provide each customer with a customized experience through their omni channel platform. Under the same umbrella, they also offer additional parallel services such as Customer Engagement Outsourcing and Extended Business Office.