Cash flow is important for any business, but for small businesses, it might be critical to survival or growth. Many smaller businesses often don’t have adequate staff to dedicate to this and don’t have accounts receivable management services or systems to deal with the specific situations they might encounter.
If your small business has cash flow concerns, you’re certainly not alone! According to a survey from the American Express OPEN Small business Monitor, 55% of businesses have such issues. Small business owners are often forced to look for new ways to access capital, or else to put growth and hiring on hold.
A SOLUTION THAT MAKES SENSE
Why constrict your business’s lifeblood when much of the problem can be resolved by collecting funds already owed? Outsourcing accounts receivable management services might help – both speeding up payment and relieving the pressures that in-house collections adds.
Staff, relieved of the burdens of collection letters and calls, can focus on the real business at hand. Besides time, you’re also relieved of costs for postage, printing, and communication. Meanwhile, the amount invested in early recovery, flat fee collections is minimal, and return rates can improve dramatically.
Better Customer Relationships
Using a professional accounts receivable management service can also help retain positive customer relationships. Flat fee services focus on earlier and more diplomatic customer reminders than contingency-based collections. Agents are well versed in the rules and regulations to legally collect and stay compliant with privacy laws. Many agencies also voluntarily follow the ACA Code of Ethics and Code of Operations, revealing further dedication to positive customer relations.
Even so, the use of a professional accounts receivable management service has impact. Third party intervention shows the issue is serious. Collection agencies utilize a proven system of consistent, escalating communications designed to get results.
Additional services offered by debts collection companies, and rarely available to small businesses, include skip tracing, invoicing, legal referral, and payment processing. For stubborn, aged accounts, contingency-based collections are available. In those, the higher cost (25 – 50%) allows for the additional work necessary to collect, but the fee is paid only when the debt is paid.
Improved cash flow can mean the world to smaller businesses. To improve your cash flow return rates, free up your staff, improve customer relations, and leverage the powerful resources available to debts collection companies, please contact us.