What are the benefits of working with a debt collection agency?
Being an entrepreneur can be super fun. Convincing customers to choose you, making money, building your brand name... Unfortunately, there are also less pleasant sides to entrepreneurship, such as discovering that an invoice you sent was not paid within the payment term. This is not only very annoying, it can also cause you to get into trouble yourself with your liquidity.
Fortunately, there are various steps you can take - such as quickly submitting your case to a debt collection agency. In this article we tell you more about how to choose a good debt collection agency, what benefits there are to working with such an agency and what you can expect from their service.
What can you do yourself if your customer does not pay a bill?
Does your invoicing software or accountant indicate that a customer has not paid a bill within the pre-agreed payment term? Then you can go directly to a debt collection agency, but if this is a customer with whom you have had a good cooperation for a long time, this can be a big step.
Therefore it is always advisable to first contact your customer yourself to discuss the situation. Who knows, maybe a bill got lost or there is another reason why the payment has not happened yet. If you reach your customer, then agree on a new payment term.
Do you keep failing to reach your contact person? No one answers the phone or do your emails bounce? Then there is a good chance that the company is ignoring you. In that case it is time for the next step: demanding your money back with a debt collection agency.
What can a debt collection agency do that you cannot?
There are various benefits to working with a debt collection agency. First and foremost, debt collection agencies have access to a lot of information in databases, for example to discover who exactly is the owner of a company. If you always had contact with a person who is not the owner, it can be difficult to know who to summon, for example. A debt collection agency is very good at unraveling complicated business structures.
You can also irritate a company a bit by emailing and calling a lot, but as a private person you really have no real pressure tools. If you choose a debt collection agency with collection lawyers, you do have that. They can make a bankruptcy application, draw up a judicial collection or start a procedure for seizure. Through legal knowledge and experience with defaulters, these collection lawyers know exactly what steps to take so they can collect your money.
What should I look for when choosing a debt collection agency?
Is it the first time you have to work with a debt collection agency? Then it may seem difficult to choose one. We recommend always reading the reviews of agencies before making a choice. Many entrepreneurs have been working with the same agency for years, so it can always be useful to ask around among fellow entrepreneurs.
Additionally, it is important to pay attention to the success rate. A good debt collection agency is open and honest about the percentage of cases they could complete in the previous year. Ideally this percentage is higher than 95%. It is also important that you know the payment method before you sign a contract. Do you pay a flat fee? Or does the agency work with the no cure, no pay method where they are only paid if they are successful in collecting money - and their fee is then charged to your debtor?
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