Every business owner has to deal with it at some point – late paying clients and non-paying clients can really put the hurt on your cash flow situation. Many business owners balk at taking on a debt recovery company to give them a helping hand, but their fears are unfounded.
Most companies with an in-house debt recovery solution are actually at more risk than those who outsource their collection efforts. A debt recovery company must adhere to strict rules and regulations that protect consumers and ultimately the businesses that go after bad debt. Unfortunately, most in-house efforts don’t have the resources you’ll find at a professional collection organization, which almost always includes attorneys who are constantly learning about new laws regarding the debt recovery industry.
You know by now that cash flow controls your rate of business growth. In fact, when you have too many clients getting too far behind on their accounts, you might even have a difficult time coming up with payroll and monthly bills like rent and utilities. At this point, you’re just scraping by and business growth isn’t an option.
Maybe you made the mistake of allowing large credit lines to help you increase revenue, but those accounts are consistently late. This becomes problematic really fast when too much of your revenue is tied up in too few accounts that seem to be on their own payment schedule.
Some businesses will combat this with incentives that give clients a break when they pay early. If a good amount of your business is tied to B2B accounts, you know that the average time to pay off a debt is more than 50 days. To give yourself a boost, consider offering incentives and see how much faster these accounts go down to zero.
In many cases, a debt recovery company will offer accounts receivable services, which means you will have the option to sell off your receivables and not have to hassle with billing on these accounts. Not only do you get a break on the paperwork, you get a quick infusion of cash that allows you to invest in growth for once instead of phone calls to late accounts.
The advantage of going with a debt recovery company is that they have the hardware and software to make contact with delinquent accounts and work out a payment arrangement. Very few companies have the in-house staff with the equipment or training to pull this off. In fact, if you’ve got an account that’s 90 days late, there is a really good chance you’ll never see that money by going after it with an in-house strategy. However, with a team of collection professionals on your side, your chances improve tremendously.
Businesses that get over their fear about their public image being tarnished by taking on a collection expert to lend them a hand realize the return on investment very quickly. When Omega-RMS, llc., is brought to the table, you’ll actually see your public image improve. Contact us today and see how we can get you back into a positive cash flow situation.