Debt Consulting

How to Treat Your Debtor during Debt Collection?

A debtor is a very important element of your business. He brings regular business to your organization. It is due to his patronage that you are able to carry out your business operations daily; else you might have to wind up your business. Hence, it is important to maintain healthy relations with your debtors so that they continue doing business with you. For this, see to it that you treat your debtors with utmost respect. Debt collection is a very sensitive area. This is where your customer relations can get ruined in a jiffy. Hence, setting up and following a basic code of conduct is essential during debt retrieval. Here are some tips that will come in handy.

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    Does The Size Of Your Business Affect Your Debt Collection Process?

Does The Size Of Your Business Affect Your Debt Collection Process?

Yes, it definitely does. The size of your business has a direct impact on the choice of method you employ for your debt collection process. A small business enterprise will have few debtors and therefore, can choose to personally carry out the debt collection process. However, this is not usually possible for large business entities that have a long list of debtors in their balance sheets. In such cases, collecting the debts personally can prove quite uneconomical and thus, the need to hire a debt collection agency arises. At the same time, a small business has a smaller magnitude of debts as compared to a larger business. Thus, the debt collection process relatively handles smaller amount of cash. This further explains why a debt collection agency needs to be hired by larger businesses and not smaller businesses. Besides, the expenses for hiring a Debt Collection Agency can prove unaffordable for the small enterprise due to smaller returns it generates; however, for big businesses, such expenses are insignificant when compared to their huge returns. Thus, it is important that you evaluate the volume of your business before considering the option of a debt collection agency.

Cloud System Vs Manual System of Accounts Payable

In the age of computers and inventions, gone are those days when manual accounting was the need of the hour. Instead, the whole world is getting automated now, and so is accounting. Nowadays, the cloud system of accounting is quickly replacing the manual accounting system. This is mainly due to the following demerits of a manual system: 1. Late Payment of Debts The manual system of accounts payable is tedious. It accumulates a lot of work by the end of the day. If accounts are not maintained in time, you will fail to get an exact figure of your debts on time, thus resulting to delayed payments. You may also be subjected to penalties and interest charges. All the more, certain allocated discounts will also get cancelled for such late payments. In the business world, such late payments of debts scare away suppliers as they no longer trust your business engagement. In worst scenarios, suppliers may refuse to conduct further business with you. Hence, adopting a cloud system that ensures quick availability of figures is a feasible solution.

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    Is Hiring a Debt Collection Agency Beneficial For My Business?

Is Hiring a Debt Collection Agency Beneficial For My Business?

Yes, it definitely is. A Debt Collection Agency collects debts from your debtors on your behalf. This means that you are not directly involved in the debt collection process. This is helpful as chances of getting into an undesirable argument while collecting debts is greatly lowered. Some debtors can be really “sticky”. They may come up with a thousand excuses for not making payment. This can be extremely frustrating. In such situations, releasing your frustration and anger can land you into a series of undesirable problems. Hence, to be on the safer side, it’s advisable to hire a debt collection agency that will professionally take care of your debt collection process. Hiring a debt collection agency is fairly simple and inexpensive. However, the debt collection agency should be highly competent. They should know how to professionally approach your debtors. Else, it can cost you a customer.  On the other hand, once you are sure that your agency is competent, you can easily maintain healthy relations with your debtors.

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