Contacting a debt recovery agency for the first time can be daunting for business owners. However, this also becomes important as small businesses suffer greatly from outstanding debt, unpaid invoices, and uncleared dues. All these things force them to avail small business debt recovery services from a reputed company. However, there are still several misconceptions about the services of these debt recovery agencies. These misconceptions can be cleared only when people know everything about business debt recovery and the overall modus operandi of a company engaged in offering these services. We have answered some very frequent questions that people have regarding business debt recovery.

WHAT IS BUSINESS DEBT RECOVERY?

Business debt recovery or B2B debt recovery is the process of collecting unpaid debts owed by businesses to other businesses. The process starts with a business owner contacting a debt recovery agency that investigates the case thoroughly and collects all the relevant debt documents. This will include invoices, bills, statements, records of previous communication and so on. Based on these, they will use various strategies and techniques to complete the business debt recovery process and recover as much overdue amount as possible.

HOW DOES BUSINESS DEBT RECOVERY WORK?

The overall modus operandi related to small business debt recovery is the same as any other debt recovery process that starts with identifying the debtor and determining the amount of the debt owed. Once all verifications are done, the debt recovery professionals Nsw devise strategies and negotiate with the debtor. Their aim is to come up with a repayment plan that is beneficial for the debtor and the lender. Professionals from debt recovery agencies offer all the assistance to the debtor in making repayment smooth and hassle-free.

WHAT ARE THE BENEFITS OF BUSINESS DEBT RECOVERY?

Timely business debt collection comes with a plethora of benefits. The most obvious ones are unpaid debts getting recovered, cash flow getting improved, financial strain getting reduced, etc. A debt recovery agency engaged in business debt recovery allows lenders to focus on core business activities with confidence that unpaid debts will be recovered soon. The benefits of recovering unpaid debts may be limited, but the benefit of the time you get by seeking the services of a debt recovery agency is the most valuable. You can use it to focus on your business’s other core areas to grow and thrive. Another benefit is that timely debt recovery allows businesses to maintain their reputation and cordial relationships with their clients.

WHAT FORCES BUSINESS TO GO FOR BUSINESS DEBT RECOVERY?

The most common reasons behind businesses seeking debt recovery services are the non-payment of invoices and the debtor breaching the contract. Other reasons include insolvency, bankruptcy, and fraud, and all these issues lead to a business facing substantial financial losses. When things go beyond their control, they focus on having a solid debt recovery plan that includes seeking business debt recovery services.

It has been noticed that the chances of recovering debts from insolvent companies are extremely low. This is why it is recommended to understand the importance of effective credit control if you have overdue accounts owed.

WHAT CAN BE THE CONSEQUENCES OF NOT PAYING COMMERCIAL DEBTS ON TIME?

The first consequence is that the business owner will avail debt recovery services and this will be a major blotch on any business’s reputation. Debt collection agencies are authorised to take legal action against the debtor in case all communications go unanswered. Another significant consequence is damage to credit score, and as mentioned above, loss of business reputation and reduced access to credit are two other major drawbacks of non-payment of business debts on a timely basis.

HOW LONG DOES BUSINESS DEBT RECOVERY TAKE?

The time consumed in debt recovery depends on several factors like the debt size, the debtor’s availability, their willingness to pay and the debt collection strategy used by the agency. Less old and smaller debts can be recovered within a week, while older debts and those involving larger amounts can take several months or even years to recover. These services of a debt recovery agency can be very helpful in this situation as the team is the specialist and prioritises relationships between the lender and the debtor. They also understand the individual circumstances and create strategies related to non-payment so that the repayment does not put any financial strain on any human being. They never use aggressive tactics in debt recovery or collection, and debt recovery professionals approach each client with a genuine desire to help and support in repayment.

WHAT IS THE COST ASSOCIATED WITH SMALL BUSINESS DEBT RECOVERY?

Just like the time consumed in debt recovery, the cost also depends on several factors, and the main one is the strategy used for the process. Other factors that influence the costs are the age of the overdue debt, the value of the debt, the country where the debtor is located and whether the debt is disputed. The cost will increase further if other services are also required, such as skip tracing, background checks, fraud investigation, credit documentation, and others. International recovery will be more expensive, as the team will have to coordinate with international debt recovery professionals to recover your dues and debts as soon as possible.

IS IT POSSIBLE TO RECOVER DEBT FROM INTERNATIONAL CLIENTS?

Debt recovery agencies are equipped with expertise and specialisation in international debt recovery. However, you just have to ensure that the agency chosen for debt recovery is the Australian representative of the EOS GLOBAL COLLECTION NETWORK. This way, it must be able to offer high standards of international debt collection services in more than 180 countries. The team must be experts in international debt recovery, debt purchase, and business process outsourcing. The process is definitely more complex and lengthy because the debt recovery agency will have to seek assistance from legal professionals regarding international debt recovery. The bottom line is that a business debt recovery agency can collect business debts from any continent.

HOW TO PREVENT THE NEED OF BUSINESS DEBT RECOVERY?

By taking some intelligent steps before handing out the debt, businesses can eliminate the chaos of non-payment or the expenses of seeking small business debt recovery. Here is a quick list of common steps to avoid hassles later.

•          Credit checking a business every time.
•          Have a full understanding of your sales ledger, aged debtors, and when your invoices are due to be paid.
•          Be proactive in sending payment reminders and late payment chasers
•          Having a plan in place to protect cash flow during non-payment.