In 2020, businesses wrote off more than $12.26 million in bad debts. As a result, many companies suffered losses from their customers failing to pay their bills. Every time a business writes off debt as uncollectible, they lose money. Unfortunately, most businesses experience this to some level. However, businesses can do something about their uncollectible expenses. The solution is to hire a small business collection agency.
How does this help? What can you expect? Here is a guide to help you learn the top five reasons to hire a collection agency in Atlanta.
1. You Have Debts Older Than 30 Days
Many companies turn to a small business debt collection agency when they have debts older than 30 days.
Your company might offer credit accounts because this feature boosts sales. However, if you can’t collect the money, your credit account will hurt your business.
You should run accounts receivable aging reports every week or month to review these debts. For example, are all your customers paying on time, or do you have some paying late?
One sign that you need to hire a collection company is debts older than 30 days. After all, the goal is to keep every account current. In addition, your business will have a more positive cash flow if every account is current.
When accounts become 30 days past due, they become harder to collect. If they’re 60 days or more past due, collecting them is even more challenging.
As you look at your aging report, you’ll instantly see where your credit accounts stand.
You won’t need to hire a collection company if every account is up-to-date. However, you should consider hiring one if you have credit accounts with past-due balances.
2. You’re Having Trouble Paying Your Bills
Another reason to hire a collection company is to increase your cash flow. You have a big problem on your hands when you experience trouble paying your bills.
Every month, a small business has many expenses, including rent, utilities, and payroll. What happens when you can’t pay these bills? Additionally, if you can’t pay them, what is causing this problem?
Some companies experience cash flow problems from low revenues and high expenses. Others, though, experience cash flow problems from uncollectible accounts.
Hiring a collection agency for small businesses is an excellent solution if you have cash flow issues from your credit accounts.
When you offer credit accounts, you budget your money based on collecting the debts on time. If every customer pays on time, your cash flow might be fine. It’s only a problem when people don’t pay on time.
A collection agency can work on collecting your debts for you. If they’re successful, it will increase your company’s cash flow.
3. Expert Help
Another reason to hire a collections agency for small businesses is for expert help with your collections. As you know, collecting money on past-due accounts isn’t simple. Do you know the best ways to collect this money?
Small businesses focus on the products and services they offer, and they’re experts in these areas. However, they’re not usually experts with collection efforts.
As a result, you might spend time trying to collect these past-due balances to no avail.
On the flip side, collection agencies for small businesses are experts in this task. This task is the service they offer. As a result, they know the best techniques to collect money that small businesses deem uncollectible.
For example, they might begin their collection efforts as soon as a customer is one day late on the payment by sending a letter. After that, they might call the customer when the debt reaches the 30-day mark.
They’ll know the best wording to use when sending letters or calling, and they’re good at collecting accounts that small businesses struggle to collect.
4. Save Time
The next reason to hire a collections agency is to save time. As mentioned, you might use techniques to try to collect money from your customers, but they might not be effective.
You’ll waste time if this is the case, but this isn’t the only way you’ll waste time.
If you assign one of your employees to work on collecting past-due accounts, they must spend time working on this task. While they might collect some of the money, they might not collect much.
Instead of using your employees’ time for this effort, you could have them complete activities that improve and grow your business.
As a result, your business might grow faster and become stronger if you have your employees focus on your business activities instead of collecting unpaid accounts.
5. Legal Assistance
The final thing to consider is the legalities in collections. A debt collection agency for small businesses knows the laws relating to collecting debts.
If you don’t know the collection laws in your state, you might inadvertently violate them. When your company violates the law, people might sue you. Ending up in a lawsuit isn’t a good thing.
Lawsuits bring on negative publicity and take time. They’re also costly and require assistance from a law firm. Additionally, there are numerous other consequences of lawsuits.
A collection agent won’t violate the laws, yet they’ll use them to their advantage. They’ll use various techniques and strategies to collect money while abiding by the law.
As a result, your company can avoid lawsuits. Additionally, your company will increase the cash it receives from your credit accounts.
The bottom line is that hiring a collection agency benefits your business in many ways. If you want to experience these benefits, you must hire a collection agency in Atlanta for help.
Hire an Atlanta Small Business Collection Agency
If your company experiences issues collecting debts that customers owe, you should consider hiring a small business collection agency in Atlanta.
Hiring an expert company to handle this role for you can improve your collections process, increasing your company’s cash flow and operations.
Are you interested in hiring a collection agency? If so, you can trust First Federal Credit Control (FFCC) for all your collection needs. You can contact us for more information.
First Federal Credit Control
24700 Chagrin Blvd #205
Beachwood, OH 44122
(216) 360-2000
https://ffcc.com
