The role and powers of a debt collection agency
There are a lot of misconceptions surrounding debt collectors and the use of third-party collection agencies.
What these agencies can and can’t do is a big part of this.
Understanding how a debt collection agency can help and support your business’s cash flow and credit control processes, helping with business debt settlement is a step in the right direction. Helping to remove some of these misconceptions and often break down some of the barriers to payment.
In this post, we take a look at what debt collectors can and can’t do, as well as the benefits of working with a debt collection agency to help small businesses with their debt collection practices.
What can debt collectors do?
Owing money – A debt collection agency can help with:
Late payments – professional commercial collection services can help you chase any and all outstanding invoices. Whether this is contacting your customer via phone, letter, or email, processes will be put in place to help to collect all late payments successfully.
Issuing default notices – default notices are typically sent to creditors after 3-6 missed payments. Acting as a warning, these notices will inform the debtor what will happen and the next steps concerning the overdue invoice and outstanding payment.
Applying for a CCJ (County Court Judgement) – as part of a debt collection agency’s powers, they will be able to apply for a CCJ on your behalf in order to set up a repayment plan with your customer for money owed. Taking care of all of the paperwork and the administration element that goes with this.
Professional debt collection services can be tailored to suit your business’s needs and requirements. Whether you’re looking for one-off collection support, or require an agency to act as an external arm to your business, make sure to work with an agency that fits with your requirements and business strategy.
What a debt collection agency can’t do
- Can’t harass customers, i.e., they can’t ring your customers every hour on the hour to chase payment.
- Can’t break data protection laws, i.e., they can’t speak to neighbours, family, or friends, etc., without the debtor’s permission.
- Can’t pretend to have more legal powers than they do.
- Can’t increase the rate of interest if the debtor misses a payment.
- Can’t stalk debtors on social media.
- Aren’t allowed to lie.
How a debt collection agency can make a difference to your business
Knowing when to seek expert help when you have exhausted all of your internal resources and “next steps” is vital.
As a business, you need to keep your cash flowing but also your business running effectively, without spending half of your week chasing overdue invoices and late payments.
How a debt collection agency can make a difference to your business:
Bring experience and skill – professional business debt collection agencies like Direct Route bring both of these elements in abundance. Bringing a wealth of experience and knowledge and successfully collecting overdue invoices quickly and effectively, we’re also equipped to deal with any situation, gathering all of the relevant information to find the best outcome for both parties.
Can navigate difficult situations with ease – most debt collectors have a wealth of experience in the field of commercial collections. They, therefore, have processes and an understanding of 99.9% of situations that occur. Able to act quickly and react positively to all situations to continue to achieve a successful result.
Abide by all rules and regulations – a professional collector will be up-to-date and fully aware of all rules and regulations surrounding collections.
Help maintain relationships – we want to ensure that the relationship you have with your customer remains strong. So we approach collections in a way that causes the least amount of tension. At Direct Route, we believe that it is always beneficial to maintain strong working relationships, and handing over collections to a third party is an excellent way to allow businesses to do this.
Provide advice and support – if a debt has to be escalated further, your debt collection agency will be able to support you with all legal proceedings. Offering valuable and relevant advice and with the ability to issue a CCJ on your behalf, your chosen agency will take care of all the paperwork. Having an expert team support you in this area can bring you not only peace of mind but also a successful outcome.
Deliver successful results – most debt collection agencies work on a results-based fee, which means they are highly motivated to achieve a successful outcome.
At Direct Route, we are a professional, friendly, and highly knowledgeable team. We work hard to help support small business debt collection.
Acting independently or as an extension of your internal teams, we’re effective and efficient in our processes and on hand to provide you with the right advice and information.