Debt collection: how to do it? A question that various companies ask themselves, increasingly grappling with insolvent customers in this difficult historical period. This situation generates difficulties of a financial and economic nature for companies, which naturally find themselves short of cash. In addition it creates a certain embarrassment within the company itself, which has to in any case recover what it is owed from customers, many of whom are perhaps long-standing.
The best solution in these cases is to rely on debt collection outsourcing, also called credit management. This is one of the services provided by We Are Fiber, always by the side of its clients to manage even the thorniest matters with professionalism.
The partners who have relied on us have considerably reduced the waiting times for recovering credit, increasing annual profit by 15%. Our staff is able to find satisfying solutions for the insolvent party, helping them to pay what is due in reasonable times and ways and guaranteeing your business the recovery of the credit owed.
Credit management and control: how does it influence the life of the company?
Before understanding how to do debt collection, it is important to understand how credit management can have an impact on the company. Specifically, you have to assess the following aspects:
- commercial: the image of a company on the market is measured also based on the level of satisfaction of its customers in relation to administrative management. An approach that is too aggressive would drive the customer away, while one that is too soft would give a negative and unprofessional image of the company itself;
- economic: the failure to collect the credit would have repercussions of an economic nature on the business, which in fact does not obtain the calculated economic benefit, with tax consequences too;
- financial: the failure to recover the credit would determine liquidity problems, with the risk even of not being able to pay the employees and the equipment purchased or simply of not being able to sustain the normal expenses;
- accounting: trade receivables must be recorded on the balance sheet, which can turn out to be off if you do not know when they can be collected.
Debt collection: how to do it and how does it work?
When talking about credit management, reference is not made exclusively to debt collection, but rather to a 360° analysis of commercial strategies and sales policies. The process of outsourcing debt collection takes into consideration various aspects, from sales to invoicing to collections, so as to indicate the most appropriate strategies as the case may be.
The methodology of collaboration with the external company can be of two types: open-ended and fixed-term. In the first case the entire ordinary management of credit is entrusted, without time limits. In the second case the aid of an external partner can be requested to solve particular cases, such as disputed or overdue credit, or for other circumstances such as the recovery of credit from thorny customers to manage or for extraordinary operations.
What are the advantages of debt collection outsourcing?
After having explained how to do debt collection, let’s now focus on the tangible advantages.
The external partner foresees and reduces to a minimum the risks of insolvency. The company realises that the credit is in trouble when it is by now too late and perhaps the documentation relating to the sale is no longer recoverable. By playing ahead it is possible to nip in the bud those situations that determine situations of insolvency on the part of customers.
The departments of the company, which operate in the economic, financial and accounting fields, have a single point of reference to turn to and can work in perfect synergy. Everyone rows in the same direction, more easily reaching the set objectives without getting into trouble. Activities prove leaner and quicker, to the benefit of company productivity. The internal resources themselves acquire new skills and abilities, usable in the immediate future for the good of the company.
Every company can personalise the type of service, also from an economic point of view. Costs can in fact depend on volumes or on performance. In addition, the debt collection outsourcing service can be requested based on seasonality or other needs.
Finally, the relationship with the customer is not damaged; the customer interacts with the company in charge of the credit service and not directly with the company.
Why outsource?
Outsourcing is a process that companies like more and more and it is requested not only for credit management. In a recent article we explained to you why it is worth outsourcing customer service.
The costs are decidedly sustainable and the investment made is recovered over time in the form of economic savings and savings of time. The company can thus focus on its core business, at the same time freeing internal resources from burdensome and repetitive tasks.
To have more information and request the service you can easily contact us by telephone or via email.
Together we can give new impetus to your future projects.
