Debt collection is, unfortunately, an unavoidable part of the lending business. Credit defaults have the potential to cause major cash flow problems and the recovery process can often be expensive, time-consuming and ineffective if you do not have the correct structure in place.
Many businesses simply lack the expertise, time and skill to effectively recover debt. This is why we have seen a drastic increase in the number of businesses who are choosing to outsource their debt collection services to professional debt collection companies like Affinity Debt Management, who specialise in debt recovery.
We discuss the benefits of outsourcing your debt collection services:
1. Reduced Costs
Recovering funds that are overdue can be an expensive and complex process as it requires staff to be highly skilled which means that extensive training is a must, unless you want to compromise the success rate of your collections.
The costs of outsourcing your debt collection is minimal compared to having an in-house team. By outsourcing your debt collections services you will no longer need to hire an in-house collections team and pay their salary and benefits. In-house collections staff are often paid a set salary regardless of how much debt they recover, this is not ideal if they are not performing well. Most debt collection companies operate on a no win-no fee basis, meaning that you will only pay for their services if they are successful in recovering funds.
2. Reduced Debt Collection Recovery Time
Instead of having your small in-house team who are, in most cases, underskilled and less motivated since they receive a set salary, why not outsource to a team of professionals who are skilled and determined to achieve the best possible results? Outsourcing gives you access to a large team of debt collection experts who are dedicated to commit all of their time and effort to recover funds as quickly as possible. The focus and determination that comes with outsourcing your debt collection services will ultimately reduce the time it takes to collect debts.
3. Increased Debt Collection Rates
Another added benefit that goes hand-in-hand with reduced collection time, is increased collection rates. By outsourcing your collections services, you will gain access to a fully dedicated team of debt collection experts who are focused on collecting on your behalf. This increased collection rate will improve your overall profits.
4. Preserved Client Relationships
By outsourcing your debt collection to a professional debt collection agency, you can distance yourself from the negative stigma attached to debt collection. You will also avoid any negative interactions with your clients. This will ensure that your business can maintain a positive relationship with clients, which will promote better client retention.
5. Focus on Core Business
The time your business spends trying to focus on collecting debts can be better spent on revenue generating activities. Outsourcing your debt collection services will allow you to focus on your core business. Through outsourcing, the burden of chasing payments is taken off your shoulders, allowing you to reduce the distractions and focus on your core business activity.
The professional team at Affinity Debt Management has a proven track record, we have successfully helped our clients increase their debt collection success rate at a fraction of the cost of having an in-house team. If you are considering outsourcing your debt collection services, contact us today.