American essayist and poet Ralph Waldo Emerson once said, ‘A man in debt is so far a slave.’
Indeed, when you have an unsettled debt with someone, you can have that feeling that you’re enslaved to that person. Even if you’re the person someone is indebted to, it would feel like there’s no closure until that debt is settled, especially if the money involved is a large sum, or the person who borrowed doesn’t seem to be making any effort to pay it.
“Sometimes, the biggest challenge for a small business owner comes when it’s time to get paid,” according to attorney, Rich Stim. “Fortunately, with a little preparation, you can minimize late payments and develop the business radar that lets you know when an account is headed for collections. By communicating effectively and working with financially troubled clients as they make their way through a rough patch, you may end up with devoted customers for life.”
Debt has been part of human history for over 5,000 years now. In ancient times, people who could not pay their debt became slaves. In fact, until now, there is some semblance of this happening. When a person cannot pay his debt, he does something else to somehow settle it, like offering his services free of charge.
If you’re running a small business, there will be times when you will encounter overdue accounts. And you know too well that bad debtors can significantly impact your business. Achieving business growth becomes more difficult and your profits become eroded.
If your company finds it tough to collect debts, you can leave that aspect to debt collection agencies. As the name itself suggests, these are agencies whose primary mission is to help companies collect money or property owed to them.
Here are the aspects of credit management that these agencies can help you with:
1. Preventing bad debts
Certainly, an ounce of prevention is way better than a pound of cure. Sometimes, you may not have the ability to spot a potential bad debtor. A debt collection agency analyzes the credit history of potential clients to find out if they can settle their debt in a timely fashion once their credit is approved.