Most people think of instructing a debt collection agency as a last resort. But seeking professional support via debt recovery at an earlier stage can be a smart move, particularly if you have limited internal resources. By ensuring that your credit control processes are managed effectively and efficiently, you could prevent a debtor becoming a serious defaulter, saving time and expense later down the line.
Prevention is always better than cure. Working independently, but also as an extension of your finance team, an external agency can handle all aspects of credit control on your behalf, from issuing statements and reminders to escalation through various stages until monies are recovered. This service can be delivered as a 'white-labelled' or revenue cycle management (RCM) solution.
Tried and tested processes
By putting debt recovery in the hands of an experienced third party provider, you can take advantage of extensive professional expertise and practical knowledge of the best ways to achieve positive results. There's a simple rule to bear in mind: effective credit control is all about staying on top of things and having an in-depth understanding of how and when to take things to the next level.
Simply continuing to send statements or reminder letters is unlikely to cut the mustard if you're dealing with a debtor who is unable or reluctant to pay. Telephone follow-up or a carefully drafted letter referring to potential legal action are the obvious next steps, followed by more stringent measures if one of those doesn't do the trick.
Escalating to legal measures
If standard credit control processes are not enough to recover a debt, the next step is legal action. That's when it really pays to have professional expertise and experience on your side. An experienced debt collection agency will know what options are available to you and how to proceed. In some cases, simply instigating legal proceedings is enough to persuade a debtor to settle their overdue account. For example, many businesses will be anxious to avoid the stigma of having a County Court Judgment against them, which can have a negative effect on their credit rating and seriously impact on their ability to do business.
