Collecting debt in theory shouldn’t be too hard, right?

You tell the person who owes you money and they pay you. Well, if it was that simple, then we would probably be out of business.

While many business owners get to enjoy smooth transactions with the vast majority of their customers, there will almost always come a time in your business lifespan where you will run into a delinquent customer or a payment dispute.

Outstanding and missed payments from customers can occur for all sorts of reasons. Sometimes they purposefully avoid paying because they are having money issues, and sometimes they genuinely forget. When this occurs, a simple conversation is all that needs to happen to get the money that you’re owed. However, it’s not always that simple when it comes to outstanding debts.

It’s important to have robust accounts and debt recovery processes in your business, because getting paid for the products or services that you provide is vital in the survival of your business. Without the payment your cash flow will be impacted. Sometimes this impact might only be small, but for some businesses, it can be catastrophic.

Even the best accounts receivable processes might be challenged by a delinquent customer, which is where a professional debt collector may be able to help you and your business. But how does a debt collector get the job done when you can’t?

Today, we’re going to discuss why a debt collector tends to have a higher success rate at debt recovery than a business. So, if you’ve ever wanted some insider knowledge on debt collection, this piece is for you.

Here’s why a debt collector can recover debts

1.      A debt collection agency has fine-tuned professional processes

The way you invoice, follow up on payments and keep track of your books will have an impact on how well you keep on top of delinquent customers (or even avoid them in the first place).

It’s important for a business to ensure that they have someone who thoroughly understands debt collection and accounts receivable processes. Depending on the size of the business, you may have a person who is solely dedicated to that role, you might even have a team of people working in the accounts side of things. However, for many small businesses, it’s usually just one of the jobs that someone does.

When it comes to a debt collection agency, they have streamlined processes for recovering debts. And these processes are ones that are proven to work time and time again. Through years of industry experience, a debt collection agency hones the processes to be the most efficient that they can be.

The specialised experience of a debt collection agency also allows them to make informed decisions about the most appropriate processes to use, which can streamline the process even further.

2.      They have tools that at their disposal that you don’t

One of the biggest challenges you may face when trying to recover your unpaid debts is actually trying to track down the delinquent client.

It’s not uncommon for non-paying clients to essentially become runaway debtors, which can make it virtually impossible for you to find.

A reputable debt collection agency will have various tracing tools at their disposal. We have access to various databases that allow us to conduct searches for location and other information. Australia has strict privacy laws and as debt collectors, we have to follow strict rules, so it’s unlikely that you will be able to access the same tools that a debt collection professional can.

3.      Collecting the debt is our business

When you run or work in a small business, you’re working on all sorts of things. From making products or providing a particular service, to managing your staff, workflow, processes, operations, and so much more. So, when you add the need to track down an unpaid debt to it, it’s just another thing someone has to do.

We mentioned earlier that having someone who can keep on track of the accounts of your business is important, if your business isn’t very big, it’s hard to have someone solely dedicated to that.

But, that’s where we come in. Tracking down the debt is our job; you hire us to do this and it becomes our focus. While we may have other clients that we’re helping to do the same thing for, it’s still our service, so we spend our time focusing on providing this service.

Being able to dedicate ourselves solely to recovering your debt means that we can usually get it done faster too.

4.      If we don’t collect the debt we don’t get paid

A common practice in the professional debt collection industry is having a policy where if there is no recovery of your debt, you don’t pay us for our services.

For our clients, this is highly beneficial as it makes working with us low risk. If we recover the debt, you pay a fee, which is usually a percentage of the overall size of the debt recovered, but you’re only paying that if we recover the debt. If you’re coming to a professional debt collector, then it’s likely that you’ve been having problems recovering this debt, so even if you have to pay fees to recover it, you’re still in a better position than you were before. And if we don’t recover it, then you’re no worse off.

Because we don’t get paid unless we successfully recover your debt for you, we work pretty hard to get the job done properly. We want to get paid too!

5.      We can remove the emotion from the situation

Even the best business people will feel feelings of frustration when they are having difficulties with a delinquent customer. It’s difficult not to – especially when it’s for your business. But sometimes our emotions can cloud your judgement and decision-making skills.

As debt collectors, our focus is on recovering the unpaid debt. And because we don’t have a relationship or any history with the client that you’re having issues with. Being slightly removed from your business makes it easier for us to focus on the facts of the matter over anything else.

When you have a relationship with a delinquent customer it can make it easier for you to accept poor excuses or make exceptions, whereas we can usually determine whether their excuse is legitimate and work with them to figure out how different ways that they may be able to pay their debt to you.

If the delinquent customer is particularly difficult to deal with, we can make it easier to resolve or avoid disputes with our many years of experience.

Do you need a debt collector for your business in Australia?

If you have a small to medium sized business and you’re struggling with recovering debts or payments from delinquent customers, we can help you.

We specialise in debt collection for small to medium sized businesses, in all sorts of industry. With more than 50 years of industry experience in our team and constant ongoing training, we’re well versed in all sorts of debt collection techniques and strategies and have helped many businesses all over Australia.

Turn to the debt collection experts at JMA Credit Control today.