Nobody said that running a small business was easy, and collections are one of the hardest parts of running a profitable operation. 80% of new businesses fail within the first few years due to a lack of cash flow. Not getting paid will kill your business quickly, while getting paid late can do the same over a longer period of time or simply keep your business from growing because you won’t have the funds to invest in improvements, new staff, etc. If you’re losing more than you’re taking in because of customers who won’t pay, you’re experiencing just one of the signs that you need some professional help with your collections. Here are a few more.
If your customers are paying with checks that bounce, your marketing may be reaching the wrong audience. While you may need assistance from your marketing team with finding a new client pool, a professional collections agency can help you recover at least some of the funds from those who already used your products or services.
Waiting Until Bills Are 90 Days Overdue
Did you know that the chances of collecting full payment are highest during the first 30 days? Debts that make it to 90 days past due have a 75% chance of being collected in full, and debts that make it to 120 days have only a 50% chance of being paid. If you are waiting to contact clients until bills are already 90 days overdue, you are wasting valuable time that could be used to get you your money faster. Fast, courteous debt collection procedures are what we specialize in at Alacrity Collections Corporation.
A High DSO
Days sales outstanding, or DSO, is a quick way to see how much time passes between when you invoice a client and when you get paid. If you have a long amount of time as your DSO, the majority of your customers don’t take paying in a timely fashion seriously. The smaller your business is, the lower your CSO should be. Your business’ financial health depends on it. Bigger companies can afford to wait a little longer for payment, but smaller organizations can’t handle a meager cash flow as a result of non-payment. If your DSO is over 90 days, it’s time to get professional collections assistance.
As a business owner, you should be focused on tasks that make you money. If you are spending more time collecting debt than pursuing new avenues for your business and getting new customers, you should hire someone who specializes in collections. Time is the one thing that money can’t buy, and wasting your time chasing down invoices is a sure sign you should trust the pros and regain your productivity.
Do you know the state regulations governing collections for all of the states in which you do business? If the answer is no, you should not be attempting to collect debt on your own! There are many strict laws that govern the debt collection industry. Debtors and companies who understand their rights will not hesitate to sue you if they know that you broke laws to attempt collection. Professional agencies know the laws and rules for every state in addition to federal regulations, so you can feel good about doing things in a law-abiding fashion.
If you have non-paying customers who have gone MIA and totally avoided your attempts at contacting them, you need knowledgeable assistance. Agencies have access to skip tracing technology to track individuals and companies who have moved locations, changed phone numbers or otherwise avoided your contacts. The resources available to collection agencies are impressive and more robust than what the average business has access to.
Partner with Alacrity Collections
Alacrity Collections is proud to be a leader in collections. We achieve great results that are over twice the national average and treat all of our customers with dignity and respect. We work tirelessly to protect your brand and improve your net returns. To learn more about our offerings and get in touch, please call us at 1-800-752-9663 or set up a phone appointment directly on our representative’s calendar via this link: www.calendly.com/hheemann.