Think about the many benefits of partnering with an ethical collection agency
See if this sounds familiar. Your business has taken all the necessary steps to ensure that you get paid on by the due date. Your in-house collections department is trained to invoice on time, send timely reminders, and offer incentives for timely payments.
Your company prides itself on its products and services and customer satisfaction. Yet, despite your best efforts, your business’s accounts receivable turnover ratio is lower than it should be. You feel frustrated because you know you deserve to be paid for your products and you’re tired of writing off debt.
Instead of investing more money in training your in-house collections department, you realize that you should partner with a team of specialists to help you recover revenue from delinquent customers to stop this cycle.
With over seven thousand debt collection agencies in the United States alone, it’s tempting to partner with any agency. However, it’s advisable to carefully choose an ethical debt collection agency that doesn’t break the rules for the following reasons:
#1 It’s Good for Business
It’s a myth that aggressive and shady tactics help debt collection agencies recover debt. While such strategies may work a few times by fluke, they’re not effective in the long-term. For example, Summit A*R has found success in the debt collection business for over two decades by taking a diplomatic approach to debt collection.
Instead of offering threats and insults, they treat debtors with dignity and respect. Their friendly but stern approach works; they have twice the industry average recovery rate. There’s no need for you to harass your clients when you can use the services of an effective agency that takes a more measured approach.
#2 It’s Good for Your Reputation
In the year 2020, the slightest misstep can put a company in the news for the wrong reasons and tank their stock. If your business partners with an unethical agency that mistreats your customer, then you could instantly go viral on social media. Damage control may cost you a lot more than you sought to recover from your debtor. As Benjamin Franklin once said: “It takes many good deeds to build a good reputation, and only one bad one to lose it.”
#3 It’s Good for Your Relationships
Fair or unfair, when a business develops a bad reputation, then their partners are the first to shut the door on them to protect their own standing in the community. An ethical debt collection agency can recover your revenue and preserve your reputation. This is especially important if you need business to business collection services. If your vendor feels violated, then other companies may also hesitate to work with you.
#4 It’s Good for Legal Reasons
After years of complaints from debtors, the Fair Debt Collection Practices Act (FDCPA) was passed. This law prohibits debt collection agencies from using underhanded tactics. Companies that violate this law have been heavily fined, sued by debtors, and even blacklisted. Remember, an ethical agency is more likely to operate on the right side of the law.
Regardless of the size or nature of your business, you should always partner with an ethical debt collection agency. The many benefits easily outweigh the risks of choosing an agency that breaks the rules.