There may come a time when the due date of an invoice passes and suddenly you find yourself in the territory of money owed becoming overdue. In this instance you may consider your options and decide to use a debt collection agency. Here lies one of the first cons. There are many many agencies, some perfectly legitimate and trustworthy going about the process professionally, while others are the opposite use unorthodox methods act illegitimately, ruin business relationships and generally make the topic of debt collection a bit of a frosty one. Choosing a good collection agency out of many is the first difficulty you might encounter.
Next you will need to find and organise documents such as the overdue invoices, debtor contact details and any other supporting paperwork before submitting it to the agency to begin the collection process. If you are using a good agency they will select the useful information for you without having to keep calling you to check up on and confirm the details.
Pros here may involve time saved for you, less hassle when it comes to communicating with the agency and validation of the information through their particular systems. Cons if you have not found a top agency may be that they take advantage of your trust and manipulate you toward paying them ridiculously high fees, possibly even abusing the information you have given them for personal benefit. Also they may not approach your debtor appropriately jeopardising your reputation and possible future business relationships.
A good collection agency will use a refined organised series of communications including well worded thought out letters, emails and SMSs. Also they will have trained agents who call your debtor addressing them in a subtle manner avoiding any unnecessary strain on the business relationship you have trusted them with.
Finally assuming collection is successful there are the fees. Good collection agencies will not try and rip you off honoring the quote that they may have provided you with at the start of the process, bad agencies will probably add in lots of hidden costs and come up with reasons why there fees have increased.
It ultimately comes down to choosing and building a good relationship with a well established collection agency. The hard part comes when you initially have to choose the agency in the first place.
We are building a rare win-win business: SMEs are able to instantly recover late invoices using our platform to access world-class collection agencies, late payers select instant payment plans and issue resolution and collection agencies gain a new revenue stream using simple integration.