Having A Good Debt Collection Partner Will Help To Grow Your Business

Running a business involves supervising various business operations, including sales, marketing, HR and benefits, accounting, customer service, risk management, and business development. Each aspect of business administration includes its own best practices, some of which expend more manpower than others.

Within the accounting function of a company, there’s the need to shorten the life cycle of accounts receivable, which, after so many months, accumulate as bad debts on a company’s books. Here, we look at how a good debt collection partner will help grow your business, especially by reducing your debtor days:

1. Practice the right amount of prevention

Avoiding financial exposures that come as a result of customers who don’t pay their debts owed to your company begins with prevention. You can work with an outside business partner to assess the risk of a new customer before opening a credit account. This includes checking the credit rating of your customer and considering other factors. One of the key factors is a credit controller’s experience and his or her gut feeling about a customer when it comes to offering credit.

2. Provide credit with restrictions

An alternative to turning down high-risk customers is to offer them credit with restrictions. A credit controller helps the company manage the risk of offering credit by alleviating each situation with tight credit control. The higher risk customers are usually fewer and are offset by customers with a good credit rating.

3. Dealing with the pressure to relax credit restrictions

As your company grows, you will want to take on more customers, and you may find that the pursuit of growth includes internal pressure to relax the criteria that your company uses to take on new customers, including how their risk factors are assessed before they are offered credit. The result could include accepting higher-risk customers with a questionable degree of creditworthiness. You want to weigh the advantages of expanding your market to those customers with the risks that they won’t pay their debts.

4. Be realistic

Generally, relaxing the credit criteria for a portion of high-risk customers will not cause a significant problem and your company will experience growth. However, it is important to have an element of security and a reliable debt collection partner to assist your accounting staff. When it comes to collecting aging debts, this kind of partner shares the workload, which may offset the stress levels of your accounting people as your company handles a higher volume of customers.

5. It should not cost you more

Working with a debt collection partner should not increase your costs. If the debt collection partner is experienced and you utilise legislation and contractual clauses, you will be able to recover any costs from the debtor.

6. Retain control

If you refer your debts to a third party debt collection firm, it does not mean you have to lose control. At Guildways, we offer clients CaseManager, an online portal that gives you an opportunity to maintain control of your debts. CaseManager allows you to view case information, download copies of all documents sent and received by Guildways, and manage all aspects of the legal work 24/7. It allows for complete transparency together with a dashboard containing key performance indicators.

7. Be robust

With higher-risk customers for whom it becomes apparent that cash flow is an issue, your collection partners can act swiftly and robustly. In order to grow your company, you want a steady flow of customers purchasing your company’s goods or services, but not at the cost of giving them away for free to those who don’t pay their debts. We have worked in partnership with many companies helping facilitate its next phase of growth by collecting their debts quickly and cost effectively. A good debt collection partner should be able to do the same for you.

For more information on how Guildways can assist in your collections, get in touch today at [email protected] or call us on 0333 340 9000

11 Jan 2022