What is flexible working? One of the realities of managing a business is the fact that not every invoice will be paid by your debtors. While it can initially just be a small nuisance to keep in mind of, if left unchecked the amount of debt can build up, leading to your organisation losing out on a good deal of income. This can be addressed by building an in-house team of debt collectors to chase after overdue invoices, however many businesses are finding it cheaper and more convenient to instead hire an external group of professionals to handle this matter for them. Here are some of the benefits of doing so:
Time is normally of the essence when a debt becomes overdue as the older it gets the harder it will be to track down, which is why it’s best to have an outsourced team ready to start chasing after it as soon as possible. Another factor to consider is that debt recovery is itself a very time-consuming process, so if you are struggling to find the time and resources to deal with its requirements, outsourcing it would largely take care of this issue by taking its burden off your shoulders and letting the professional handle the task for you. There is also the added bonus that collectors are typically more familiar with the resources and methods required to collect debt, which will therefore make them much quicker and efficient at seeking it out.
Since debt recovery agencies deal with overdue debts on a daily basis, they are more than likely very experienced in the skills and knowledge needed to collect debt quickly and efficiently. Your own business will likely only see debt collection as a secondary process meaning that it is unlikely to be as efficient as outsourcing without years of investment and continuous practice for an in-house department of your own. That is why outsourcing debt recovery to a group of already experienced and established professionals will likely be the better option.
Flexibility and Scalability
If your organisation is particularly overburdened with other matters, and you do not have the time or resources to pursue overdue debts, then outsourcing could be a good way to simplify the process through flexible contracts and quick implementation of their debt recovery. This is especially the case for large and complex organisations as it could avoid the need for slow and ridged restructuring needed to establish an in-house department.
Reduce Cost and Risk
Many outsourcers operate on a non-win non-fee basis, which would significantly reduce cost in comparison to hiring the staff to pursue the debts yourself when building an in-house team. This also goes in line with the fact that many collectors pay their own expenses, therefore further lowering their average cost of hiring them.
Increases Your Recovery Rate
If the debtor receives a letter before action from an outsourced solicitor, then they will be much more likely to repay their debts as the threat of legal consequences will now be a very real possibility. Other debt collectors will typically take over their client’s accounts receivable function in order maximise its potential and fully handle their invoices which naturally leads to an increase in their debt recovery rate, with the added bonus that many of them work on commission hence further motivating them to recover as much debt as they can for their own benefit.