Every business owner that went through debt collection can agree that it is one of the most exhausting tasks they’ve done if they want their business to thrive. Many companies suffer from having poor management of their cash flow, which is experienced when they neglect past-due accounts.
A company’s cash flow is the lifeblood that dictates whether a business can purchase items for its inventory or to pay its employees. If the cash flow is hampered, a business would suffer and have its growth hindered, effectively taking it out of the various companies’ competition.
Debt collection may seem to be a straightforward task that companies can do on their own, but such isn’t the case. There are various do’s and don’ts in debt collecting.
A company would first have to trust a debt collection agency to handle the collection since it is typically equipped to deal with such tasks. Not all debt collection attempts can result in success, but specialised agencies can handle such cases as they have the skills needed to manage them.
Establishing a solid line of communication between your company and your debtors is essential, but rather hard. It is necessary to prevent any disputes from springing up due to lack of constant contact while being able to stay professional.
Debt collectors should not, however, contact the debtor at work, using social networks, outside the specified timeframe, and others stated in the United Kingdom’s FCA, FTA, and OFT regulations. The debt collection rules may vary per country and state, but they agree that harassment is something companies should never resort to.
When collecting debts, it must be done with prior knowledge of the debt collection laws in the country to keep collectors from violating any of the laws.
There are a few more things that collectors should and should not do when collecting debts, including formulating a plan to deal with collection issues and not to wait until accounts are past due. For more information on such, see this infographic by Brodie Collection Services.