The right time to entrust your unpaid bills to a collection company

Collecting amounts owed is an important financial milestone for your business, which adds to cash flow and helps keep your business afloat.

Often contractors make the mistake of waiting too long before subcontracting their outstanding payments to a debt collection company. Some choose to manage their debt collection internally. However, more and more entrepreneurs are making the decision to outsource debt collection to an external partner.

Deciding when and if to outsource your debt collection to an agency is one of the most important cash management decisions your finance department will make. But how do you know when to take the step?

Here are some warning signs that it might be time to take your debts to a collection company:

Your client plays the ostrich

When you send your customer a strong message that it's time to pay, and they avoid it, that's definitely a red flag. Avoidance is not acceptable and contracting out to a collection company at this stage gives you the advantage of the "third party effect".

Your client is making silly promises

Your customer responds to your reminders with promises of payment that he does not respect. You give him payment plans but you don't see anything coming to your account. No need to give him new deadlines or plans for clearing your invoices. You must take the next step.

Your customer only makes partial payments

Your client is trying to save time or is facing financial difficulties. Contact him for a formal clearance plan. If he refuses or does not respect your conditions, do not hesitate to entrust this unpaid bill to a collection professional. Collection companies are much better equipped to handle this type of follow-up.

Your client is driving you crazy

Some latecomers find every possible excuse not to pay you. They claim, for example, that they are not the right person to contact or that they have not received the invoice. A debt collection company will be able to access the source of the late payment, identify the right contact person and collect your debt for you. Again, the "third party effect" shows that you are a serious business partner and should be respected as such.

By outsourcing the recovery of your invoices, you will improve your cash flow but also the efficiency and seriousness of your business.

Here are various reasons why you should entrust your collection to a professional:

• Reduce costs and risks
  The costs of outsourcing debt collection are minimal. The majority of collection companies have support costs and commissions such that their intervention is generally covered by the recovery. Outsourcing your collection saves you the expense and risk of managing an in-house collection team
• Improve your cash flow
  Optimized bill payments improve your business's ability to maintain positive cash flow. Outsourcing debt collection not only saves you money but also frees up your time to focus on your own business.
• Maintain good customer relationships
  Relationships with your customers are essential to the smooth running of your business. Outsourcing your collection will allow your company to maintain its image with your customers. You'll offload difficult customers and focus on positive business relationships.
• Make the best use of human resources
  In a difficult financial environment, it is important to mobilize your human resources on commercial and prospective functions. By outsourcing your debt collection, you can free up valuable staff time to focus on what really matters to your business: getting new customers and keeping them happy.
• Focus on what you do best
  Outsourcing the management of your outstanding payments allows you to focus at 100% on your good customers and on what you do best: your business. Freed from the burden of pursuing bad payers, you can focus on optimizing your products and services as well as satisfying your good paying customers.

Collaborating with a debt collection company considerably reduces your late payments and your outstanding payments in the medium term. You save time to focus on your business and its development.