Debt Collection Services - Accounts Retrievable Systems
Strategy for Success: Hiring Commercial Collection Agencies
Its more cost effective to nurture existing customers than to acquire new ones, so many companies are responding to market pressure by reducing prices, extending terms, and offering promotions. At the same time, they are becoming more aggressive in helping their customers keep to payment schedules.
As it is with parenting, so it goes with sales: simultaneously trying to be good cop and bad cop can be just as confusing for customers as it is for children, which is why companies are calling in commercial collection agencies. The benefits are many:
• Company representatives avoid becoming embroiled in adversarial relations with customers that can deteriorate to the point of no return, literally
• Company representatives can use their time to nurture existing business and develop new clients instead of collecting debt
• Collection services are usually paid on performance, so they are not a drain on business cash flow
• The sooner collection is attempted, the more likely it is to yield results, so collection agencies should not be viewed as a last resort but rather as a normal business process
Immediate Relief
Businesses that need funds immediately may be able to sell their accounts receivables outright to debt purchasing agencies. In this case, businesses receive only pennies on the dollars owned to them, but they get their money right away and get to take the liability off their books. Debt purchasing companies make their money when they are able to collect more than what they paid for the accounts.
The decision to hire collection agencies or to sell debt is more about the need for cash than about the relationship with delinquent customers. Neither choice necessarily precludes sellers and buyers from doing business in the future.
Article Source: www.venderseek.com
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