Cash flow is the lifeline of all businesses.
However, maintaining a positive cash flow balance can be challenging when customers fall behind on their payments.
Whether small or large, every business is likely to face the strain of missed payments. Though the loss may vary, failure to recover the lost money can pile up and significantly impact your revenue.
Businesses should follow a fair but aggressive way to recover outstanding balances. But not at the cost of their relationship with customers! Keeping your customers loyal and happy once the debt collection process starts can become challenging.
So what should you do to collect outstanding payments without damaging the relationship with your customers?
Thinking of outsourcing to a debt collection agency?
(WHO MAY NOT HAVE LEGALLY TRAINED EMPLOYEES)
Think again!
While hiring a regular debt collection agency might seem a go-to option, it might not be ideal for your business. Overly aggressive and money-minded collection agencies may use some methods that can ruin your reputation and sabotage your relationship with the customers.
As markets are competitive with tight margins, businesses can’t afford to lose even a single customer to debt collection agencies.
Why are traditional debt collection practices not relevant to your business anymore?
A heavy-handed approach
Third-party collection agencies can follow an aggressive approach, like constantly calling your customers to annoy, abuse, embarrass, or harass them. Such practices, which are not in your control, are not healthy for your reputation. You may even lose your customers since the agency represents your business.
The cost involved
Depending on how much debt you need help with and how old the missing payments are, collection agencies can charge somewhere between 20% to 50% of your collections.
Quite an amount. Isn’t it? And what’s worse? The risk of damaging your reputation!
Account prioritization
Collection agencies consider various factors while prioritizing debt accounts. You may need to recover outstanding payments to keep the business afloat, but perhaps your account is not even on their priority list.
Customers can resent your business
Your customers may be willing to pay for the services rendered, but they can’t afford them due to some unavoidable circumstances. What should you do in such a situation? Hand over the sensitive matter to a third-party collection agency only to harass your customers and lose them forever? The last thing you want is to be associated with an agency that may unnecessarily bully your customers or push legal boundaries.
So what’s a better way to collect missing payments and win your customers’ trust?
Why not use a debt collection software system?
Using an automated collection system can help you collect the owed amount faster, increase efficiency, and improve profitability while maintaining good relationships with your customers.
The best thing is – a system never sleeps, forgets, or has bad days!
- A system can handle the entire debt collection process when you’re busy handling your business.
- It improves operations efficiency by ensuring excellent coverage and higher connect rates.
- For the system, you are always the priority.
No customer embarrassment
No human involvement during the collection process means no embarrassment and pressure to pay the debt. Getting a courtesy payment reminder with flexible payment options can help your customers pay the outstanding amount according to their circumstances & affordability.
Avoid customer confrontation
With no one to confront about the debt, customers can think calmly and evaluate the outstanding payment they owe to you logically. Cooler heads usually bring positive responses, and customers tend to pay as long as they are reminded consistently & subtly.
Eliminates the need for haggling
When the system sends a documented invoice, there are fewer to no chances of negotiation. As you give flexible options to pay for the missing payments, customers agree easily, and gradually, your bad debt is recovered without impacting the business-customer relationship.
Denefits AR – Making debt recovery easy, efficient, and customer-centric
Denefits Automated Accounts Receivable is simple and efficient. It focuses on minimizing the DSO – Days Sales Outstanding and processing costs while maintaining healthy relationships with your customers.
There‘s no additional fee for your business to use this feature, and you can easily track payments made by your customers.
If that sounds great, wait for more!
Customers receive the invoice, and they can pay all at once or start a payment plan to afford the outstanding debt. Apart from that, you also get an option to split the transaction fee if you want.
It takes less than 30 seconds to send an invoice to your customers. They will receive a payment link by email or text with the invoice.
Your customers can review the details from the comfort of their homes and make the payment at their convenience from any device. The system will then continue to send reminders until your customer makes the payment. Using the Accounts Receivable option, you won’t have to print or mail out a bill, and you’ll receive your payments – a greener and faster way to collect outstanding payments.
To learn more:
Free up your time for tasks you do best!
Denefits will handle your debt collections and customer-provider relationships with care.
Let the Denefits AR system take the burden off your shoulders and collect your written-off amount while you focus on running your business.
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