Accounts Receivable Services » Small Businesses and Uncollected Debts
As a small business owner, in the business of making on-line payday loans as well as in-shop payday loans at four stores, I identified the use of a very good collection agency to collect our uncollected debts to be a valuable asset that, when we had tried, became an arm of our business that we could not live without. Having tried in-house collections for numerous months to attempt to collect our sizable uncollected debts, we soon determined that we were on the wrong track and desperately required a very good collection agency or two.
As soon as we submitted a portion of our uncollected debts to a collection agency, we right away saw the positive aspects in the form of expert guidance and superb organization of consumer data via state of the art software program and support personnel.
Soon after utilizing a number of national collection agencies, I should say that I have identified that most, if not all, utilize up to the minute real-time collection software, thereby increasing exponentially the bottom-line of those companies who have the presence of mind to hire a great collection agency when they uncover themselves inundated with uncollected debts. We discovered ourselves in just such a position with both our on-line payday loan clients, because we were writing 2,000 loans per day, as well as with our in-shop consumers who, though smaller in numbers and longer-term buyers considering that some had been with us for 10 years, we all know that even an excellent consumer can go poor in a bad economy.
In order to collect our substantial uncollected debts, we now only utilize our in-house collection department, [which we were able to decrease in size to only 10% of the original size hence greatly decreasing our overhead], for only the payday loans that are less than 30 days past due and we outsource the rest. The percentage of our total loans that goes out to the collection agency in any given month is at least ninety percent and we are more than pleased to do so given that their expertise and diligence has tremendously increased our profits.
The small percentage of the payday loans that a collection agency charges for its services is quickly offset by the decrease in overhead and the enhance in profits that any company with uncollected debts will realize. At my payday loan organization, we have discovered that outsourcing our loans is a sound profitable business decision.
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