Commercial debt recovery, also known as B2B (business to business) debt collections, are terms used to describe the methods and process of collecting outstanding debts or overdue invoices, i.e., recovering money that a business customer may owe another business for a product or service they have received.
However, business-to-business can be complicated, especially when it comes to overdue invoices and chasing outstanding money.
We understand that invoices must be paid to keep your cash flow healthy, and we also know that you want to protect your business reputation and your relationship with your customer.
That’s why the range of debt collection services available now is vast. Helping to support businesses in their growth plans and avoid bad debts and late payers from harming business operations.
Throughout this post we look at the types of businesses who opt for debt recovery services to help their business as well as some of the benefits debt recovery services can offer.
Commercial debt recovery business types
Commercial debts refer to business transactions only. Business transactions that now see an invoice overdue or a debt no longer being repaid.
Often with commercial debt collections depending on the size of the business, you will find credit processes in place within areas such as accounts receivable, accounts payable, sales, credit, and financing, with all of these areas managed by the owners, managing directors, and accounting teams.
What can you do if a commercial customer refuses to pay their invoice/is considered a late payer?
Put them on stop – restricting them from purchasing more goods from you until the debt is settled.
Assign debt collectors. Working with an experienced and professional debt recovery agency can help you to recover overdue invoices much quicker and more efficiently.
Business lines of credit can be negatively affected, limiting how much you are offered and how much you can borrow.
Seek legal advice; depending on how long the debt has been outstanding and your attempts on the collection, you can look at issuing court proceedings against your customer.
When should you hire a collection agency?
If the outstanding debt is considerable, you can’t afford to write this off and lose it from your cash flow.
When the debt is a considerable age. The success of collecting older debts is higher when working with a debt collector.
The cost of collecting in-house has become inefficient. If you are spending a significant amount of time and resources collecting outstanding debts, who is carrying out the day-to-day operations? At this point, hiring a debt collection agency may be more effective, which can be especially beneficial if you don’t have a dedicated collections team in-house, the resources, or the skills and expertise to carry out effective collections.
Commercial debt recovery types of business
The types of businesses that use commercial debt collectors to recover the late payment of commercial debts include:
- Software companies
- Marketing and creative agencies
- Manufacturers
- Technology firms
- Consultancy firms
- Construction companies/suppliers
- Wholesalers
- Telecommunication companies,
- And more.
Ultimately, any business struggling to collect unpaid invoices can use a professional, commercial collection agency because, trust us, not everyone is immune to non-payers.
Benefits of working with a professional debt collector
Professional debt collection teams specialise in recovering outstanding debts. They have the skills, expertise, and experience to collect on your behalf successfully.
Many businesses don’t have the time or the resources to collect and continually chase outstanding invoices and debts; this is where a professional collection team can work on your behalf and give you back the element of time—allowing you to focus on other business areas.
Businesses also opt to work with debt collection agencies to help keep their accounting processes effective and efficient, putting the right processes and accounting strategies in place to limit late payers.
Businesses use commercial debt recovery if they have large volumes of outstanding debts that have now become unmanageable in-house, and outsourcing is the perfect solution—allowing you the opportunity to focus on core business operations while having peace of mind that consistency and efficiency are applied to your accounting practices.
As independent, third-party agents’ business reputations and relations can always be protected when working with an experienced collections team.
Fees are a relatively small percentage of the total debt recovered, with some collection agents operating a no-collect, no-fee policy.
You improve your business’s financial health as you have access to the debt collector’s knowledge and skills, achieving a higher rate of success.
Late payment of commercial debt
Debt recovery services help to keep your cash flow flowing – it is vital that you get paid and paid on time; we can help you achieve all of this and provide you with robust processes and practices that keep your credit control running effectively and efficiently.
Debt collection agencies help relieve the burden of collecting business debts and are used by various businesses for various reasons.
If you’re struggling to collect overdue debts and outstanding invoices are piling up, call our team today at 0330 229 1991 or email your requirements to memberbenefits@directroute.co.uk – we can help with a range of debt collection services as well as help you put robust credit management processes in place.
Read the next article: All about commercial debt act