Every business owner knows that extending services to potential customers comes with a certain risk. Despite conducting a credit check, there will come a time when some customers will be late with payments, or worse completely stop paying. When this situation occurs, the company has two options:
- Cut ties with the customer and bear the loss
- Attempt debt collection personally or through a debt collection agency
But when it comes to collecting unpaid debt, many companies find it hard to determine the best time to entrust the responsibility to the experts. This article will discuss the signs which point toward deciding to hire a debt collection agency.
Difficulty finding the debtor
When the debtor is still responsive to phone calls, letters, or emails, it is a sign that the debtor still intends to pay. However, when tracking down a customer who has unpaid debt has become difficult to the point where the person already severed all points of contact, it is time to hire an expert debt collector to track them down. Debt collection agencies have access to tools which they use to help you find people and proceed with collecting a debt.
How long is the debt past-due?
The policies vary from one company to another, but the general rule is that you can turn the debt over to a collection agency when it is more than 90 days overdue. Although it is possible for in-house collections to collect a payment successfully, there are times when the debtor becomes increasingly uncooperative. Hiring a debt collection agency increases the chances of getting the debtor to address the concern faster.
Multiple bounced cheque payments
Another sign that it is time to hire a debt collector is when you have received numerous payments that bounced. When this happens, the debtor likely has no intention of paying and is only sending cheques to thwart your collection efforts.
The debtor keeps coming up with excuses
Debtors, with no intent to pay, come up with a new reason every time you try to speak to them on the phone. Going through this process over and over can be extremely taxing and inconvenient, especially since you have a business to run. Hiring a debt collection agency will take the responsibility off your hands so that you can focus on more important responsibilities.
Stalling tactics and broken payment promises
Debtors are allowed to make a promise to pay their debts, but what matters is how they honour the commitment. When you have given multiple opportunities for a debtor to stay true to their word, yet breaks it anyway, it is time to move forward with hiring a debt collection agency.
Although these signs are significant indicators that it is time to let a third party followup with debtors, the decision still depends on the business owner. When you have a reliable agency doing the work for you, you can sit back and wait to have the money owed you settled by troublesome debtors.
To read more on topics like this, check out the business category.