Yes, there exist myths in debt collection as well specifically, when you use a third-party for collection of debts you tend to hear a lot of such myths. They can even make you hesitate in your decision to hire a third-party. Collecting debts can tire you to focus on while in the middle of business. Debt-collecting agencies come to your aid at this point. They can help you get back your money smoothly.
DEBT COLLECTION:
Almost 56% of businesses have known to write off more than 1% of their turnover and lent capital as uncollectible. This percentage has continued to rise since 2013. Though it’s an alarming fact, you can still sort out the problem. Hiring debt collection agencies can help you a great deal with this. Debt collectors turn out as inhumane rather than the fact that they are demanding what belongs to them in the first place!
So hiring people who can handle it in the right seems logical. Read further to understand some of the myths associated with debt collection. You can get to know the reality that prevails as well.
Myths and reality about debt collection:
We have discussed the top 6 debt collection myths below, for you to stay cautious from them jeopardising your decision.
1. MYTH: YOU WILL FIND DEBT COLLECTION EXPENSIVE
Reality:
You will find that most debt-collectors do not ask for payment unless they succeed. They work on a success only basis. You will also find that the price they commission is very minimal. When you compare it to the money, you would have lost if you had written off the debt as uncollectible.
2. MYTH: YOUR CUSTOMERS FIND IT UNFAVORABLE
Reality:
When you hire an excellent debt collecting agency, they prioritise your customer relationships as much as you do. They also take your brand very seriously and importantly, also just like you. At Kenstone Capital you will find the same. We aim and work towards a peaceful mediation when collecting debts, and we keep reminding and reaffirming them to pay.
Yes, they can shun at the fact that you hired a debt collection agency, but you have done it only to get back what they owe. The capital entirely belongs to you, and you have the most exclusive rights to ask for it. They also have a duty towards you and your debt.
3. MYTH: ONLY BIG COMPANIES HIRE DEBT COLLECTION AGENCIES
Reality:
More than thousands of small companies today, hire debt-collecting agencies. They do not get time to focus on debt-collections as their primary focus is on the business. They work towards improving it and marketing their brand, also they have a small team when it comes to small businesses. Thus everyone plays multiple roles, and they can’t form a team debt-collection team too! So when you hire a debt collection agency, you can focus more on your business improvement.
4. MYTH: DEBT COLLECTION AGENCIES ONLY WORK FOR ANCIENT DEBTS
Reality:
Research studies conducted on debt-collection portray that time of old debt reference, and the chances of collecting the debt are directly proportional. When you refer to the debt as early as possible the chances of you recovering goes up. So you can refer to debts in their early stages instead of waiting for it to become old or bad debt. Thus refer to agencies faster than chasing debts for months in-house.
5. MYTH: YOU FIND SOLICITOR MORE EFFECTIVE
Reality:
Though there exists time and place for the legal system, you will find it very costly and time consuming. Instead, you can benefit from a good debt-collector and also avoid unnecessary problems.
6. MYTH: YOU CAN DAMAGE YOUR BRAND WITH DEBT COLLECTION
Reality:
When it comes to reality, you only need to find a top-notch debt collector. The person respects your brand and smoothly gets the process done. You introduce a debt collection agency as part of your standard credit control process. When you do this, the agency complements your in-house collection efforts while simultaneously putting pressure on your debtors. This way, you get paid, and also your brand continues to reign.
