Thousands of small businesses refer debts every day ranging from a few hundred dollars through to tens of thousands of dollars. These businesses recognise that their expertise is related to their product or service, not collecting money. They use third party debt collectors like PARAMOUNT COLLECTIONS because they know their chances of being paid increase significantly and they only get charged when outstanding debts are collected.
1 Debt collectors are something you use when overdue invoices are extremely delinquent.
The truth is the earlier you refer the debt the more likely it is to be collected. Research shows that debts referred for collection at 30+ days overdue are nearly three times more likely to be collected than those referred at 90+ days overdue.
2 Using a debt collector means losing a customer forever.
The truth is this depends on the debt collector and when you refer the debt. A good debt collector understands that their job is to collect the money you are owed while helping you maintain your customer relationships. By referring debt early and using a collection agency as part of your normal accounts receivable process you can ensure the agency complements your in-house collection efforts, protecting your brand, while still escalating pressure on your debtors so you get paid sooner. Make sure your collection agency is reputable and takes your brand as seriously as you do.
3 A lawyer is more likely to get me an immediate result.
There is certainly a place for legal action in the debt collection process. However, effective collection involves collecting as much of your money as possible at the lowest cost. The legal process can be time consuming and expensive and generally should be pursued only as a last resort. The best approach is to find a collection agency that knows how to work your debt and only gets paid when you get your money.
4 Using a debt collector will damage my brand.
The truth is it depends on the collector you use. The key is finding a collections company that understands the importance of a brand and is committed to protecting yours while also maximising your cash flow. Look closely to see if a debt collection agency takes pride in their brand. If they do, chances are they’ll take the same care when representing yours.
5 Get the real picture
Paramount Collections is a leading provider of credit and receivables management services.
The philosophy behind collecting debt has evolved. Collectors’ role in the relationship between consumers and their debt is now more of a sales dynamic: Customer service tools serve collectors better in the long run when interacting with consumers than the more strong-armed tactics of the past.
