Express Debt Collection

Outsourcing! Much has been written and talked about the subject. Strange, for a term that was hardly heard of just ten years ago. The word can often conjure up thoughts of overseas call centres full of well meaning, well educated enthusiastic people proudly representing an organisation based thousands of miles away. Similarly, it could represent memories of holding ages on the telephone, language barriers, cheap wages and complete frustration. The general view is that outsourcing is specifically for Blue Chip organisations, especially utility firms. That may have been the case in the past, and whilst it is believed that over half the companies listed on the FTSE utilise outsourcing, it is becoming increasingly popular with many SME’s. Apparently many small firms still think they are too small to outsource. They don’t believe there are companies that are interested in their business. Not so. As a small or medium sized business you are a highly prized asset to many firms offering their services. In truth, most SME’s are looking to expand and outsourcing can offer them access to higher quality resources. In specialised areas like IT and Finance, SME’s can find a better quality resource offshore. In many cases this can be achieved at a fraction of the cost. One area many SME’s achieve real benefits from is outsourcing credit control. Let’s face it, what small company doesn’t want/need better cash-flow. This should be undertaken in the same country as there is little doubt that having a language barrier, perceived or otherwise can be perilous in the area of cash receivables. This is definitely an area SME’s can ill afford to take risks with. The good news is there are a number of agencies who specialise in professional commercial credit control. Often, these agencies will contact debtors in the name of their client and this will usually be more effective and professional than if done internally. Another key benefit for SME’s is that this will often be done at a much lower cost of operating in-house and relieves the hidden costs of sick days, tax contributions and management. Considering cash-flow is the number one reason SME’s fail, outsourcing this area to a specialist organisation would seem a smart move. Management guru, Tom Peters, hit the nail on the head when he said “Do what you do best and outsource the rest”.

OK, I am in the murky world of collecting money and I can exclusively reveal that many businesses both large and small are owed money. Really? I hear you ask. Glad you came? OK, it’s not that incisive. Lets face it, unless a business operates on a strictly cash on delivery basis, its bound to have money tied up on the debtors ledger. I have no idea of the ratio, so let’s make it up. Let’s say that 82% of companies send out invoices and give credit. If we say it enough times, it’s bound to become the accepted figure quoted by various banks and other financial institutions across the world. Like the fact that 26 is the national average scored with three darts, which must be true. Anyway, enough of that. Suffice to say, the vast majority of businesses give credit. My experience tells me that an even bigger majority of these could/should improve their collection performance. This is especially relevant with new companies as they tend to be either too scared to offend precious clients or too protective towards their income to seek help from a 3rd party. This is not helped by an apparent lack of knowledge of what 3rd parties actually do. Here’s a comment that may make you sit up.
COLLECTING MONEY IS EASY&quot
That statement is true with one postscript as long as you have a structured system for aged debtors in place. Quite simply, implementing a process for collecting your invoices that includes utilising a 3rd party at an agreed point will ensure you can concentrate on other core areas of your business. Internal systems should include (at the very least) the following:
Credit Check for all new clients (price appx £25)
Notice period for disputes
Ownership of product
Statutory Interest
Procedure for late/non-payment
These terms seem obvious and should quite rightly be a matter of course. However, at our agency in London, we get many cases every week were all or most of these haven’t been implemented. Further to that, the debtors in most cases know that they ultimately hold all the aces and will end up paying when they want to, not when you need them to. Reasons like: It was a big Blue Chip. They have done business with us for ages. It was a big order, so we didn’t want to jeopardise it, or It was only a small order, should be immediately banned as any justification for not operating sound business practises.
I cover the area of 3rd options in another article (Read Here) but there should be a point in the age of a debt when it is passed to professionals. As a rule of thumb, six months is too long. Remember, every invoice that exceeds your credit terms has a negative impact on your company’s profitability. Very often these are hidden costs which organisations often wrongly consider to be part of running a business. This fact is undeniable;
Bad Cash-flow can kill
To clarify, implement 3rd party involvement at a specific age of every invoice. As long as you have vetted the agency, negotiated good rates and just as importantly discussed your business (clients, products, service, ethos etc. Any 3rd party who don’t ask about you, should be avoided) you should ensure optimum credit control. All businesses will suffer from bad debt at some point. It’s a fact that some businesses go under and some are even out to steal from you from the beginning. However, these are very rare and as long as you implement the procedures outlined above, you will dramatically reduce your exposure to slow/bad debt.

Just to be clear, The Express Group is a London based commercial credit control and debt Collection Company with over forty years of experience.

The aim of this blog is not to promote our business or services, so we apologise in advance if during the course of any future discussions, we occasionally mention in passing details of the services we offer.

Lets face it, if someone happens to mention that their company has a huge bad-payer problem and they are desperately looking for a company to assist them….well, it would just be rude not to gently remind them that The Express group are in fact one of the most respected agencies in the UK.

The blog will be a true company one and will have regular contributions from various members of The Express Group staff.

Our aim is to be a portal that will hopefully resolve issues, offer impartial advice, recount case histories, discuss current legislation and generally be a useful hub for anyone involved or interested in the area of debt.

It would be encouraging to think that it could be as useful for debtors as well as creditors. That remains to be seen.

It is probably wise for me to point out that the ethos of The Express Group is to resolve debt collection issues without recourse to the legal system and as such we will endeavour for this not be become a forum for legal issues, but rather a positive arena for successful outcomes of debt issues.

It goes without saying that your views are greatly encouraged