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Debt Collection Misconceptions
Debt recovery companies can be a powerful weapon in the fight to secure late payments. The modern debt recovery firm employs sophisticated and flexible methods to recover debt while maintaining those important customer relations.
Unfortunately, there are still some misconceptions in the business world when it comes to debt recovery firms and how they work. In this article, we set out some of the main misconceptions and explain why they are wrong.
Debt Collection Misconception: a Debt Collection Agency is expensive
In fact, most agencies operate on a no-win, no-fee basis, so they are only paid when the debt is recovered, and their fee will usually be in proportion to the size of the debt they have recovered. Not only can this fee prove to be a lot cheaper than the costs of writing off a debt, but modern agencies are also often successful in securing interest and late payment fees in addition.
Debt Collection Misconception: It is only for big companies
Debt collection agencies work for companies of all sizes, but they are particularly useful to small businesses. Smaller businesses are less likely to have the staffing resources or expertise to pursue the debt, so by outsourcing the credit control aspect of their work, they can more efficiently chase debt while freeing their staff for other duties.
Debt Collection Misconception: Debt Recovery is only for old debts
There is plenty of research to show that the earlier that debt is handed over to a debt recovery agency, the more likely it is to be recovered. So it makes sense to use debt collection professionals to chase debt at an early stage. You can even arrange an ongoing debt recovery system in which an agency will automatically chase a debt that hits a certain age.
Debt Collection Misconception: Customer relations will be harmed
This misconception is based on an outdated view of the debt collection industry. A modern debt recovery company will understand the importance of brand and customer relations. In chasing debt, a good agency will ensure that their methods are courteous and professional at all times, maximising efficiency in recovering late payments through a range of measures, including negotiated repayment plans, without risking your customer relationships.
Misconception: It is better to use a solicitor
Although the legal system has its place in debt recovery, it is only part of the solution and is both time-consuming and costly. The advantage of a good debt collection agency is that they can often recover your money without needing to get to the stage of legal proceedings, though will have access to the expertise required to guide you through the legal debt recovery route if required.
Debt Collection Misconception: Using a Debt Recovery Agency will hurt my brand
While this is an understandable concern, it does not reflect the reality of modern debt collection or the fact that you are free to choose the debt recovery agency that you feel will work to uphold your business reputation to the greatest effect. By choosing an established, well-reviewed debt recovery agency, you will be able to recover your debt in a professional and effective manner.
If you are interested in finding out more about how a modern debt recovery company works, or you are struggling with late payment issues affecting your company, get in touch with us today and find out how our team of dedicated UK and international debt collection professionals can help.
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