Reduce Paperwork And Manual Entry With Debt Management And Collections System
Join 1000's of Authors at StreetArticles Today!

The management of debt is a thorn in the side of any business. Unless appropriate measures are taken, debt management can easily outstrip the actual debt in terms of cost. This is why systems for debt management and collections are so critical to businesses that transact in debt, and this is why collections agencies exist. A debt management and collections system can streamline and simplify the process of managing debt and avert the need for hiring a collections agency, saving a business time and money almost immediately.

Generally, a business sells its debts owed en masse to a collections agency. The collections agency then tries to collect these debts by contacting the debtor and punishing their credit ratings. The arrangement is mutually agreeable: collections agencies are better-equipped to pursue debts than the average business. Maintaining an internal collections service is outside the scope of what most businesses can manage without sacrificing productivity in other areas, so hiring a collections agency and selling off debts is roughly equivalent to outsourcing any other task.

However, this is not the most efficient way to collect on debts. While running an internal collections program is usually not cost-effective, hiring a collections agency isn't as efficient as it could be. Any debt sold to a collections agency will be sold at a loss. It isn't actually a means of getting the amount owed, but rather a means of cutting the company's losses.

A debt management and collections system allows companies to handle collections on their own with a degree of automation. A well-built system will track debts owed and payments made, allowing a business to follow-up much more easily. Some systems are capable of autodialing and sending automated messages, and with some human intervention, it's even possible to send physical mail. In effect, it allows a business to take more steps toward collection before an outside agency is hired.

There are still advantages to hiring a collections agency if you are unable to collect your debt even with a management system. However, for businesses like service providers that may incur indebted clients on a regular basis without severing the business relationship, having an internal debt management and collections can greatly speed up the process by taking all of the steps a collection agency would open up with. Doing it internally is more efficient; you can bargain with the customer for the full sum or for a reduced amount on your own terms, rather than leaving this to the agency.

While it will never be as powerful as a proper collections agency, a debt management and collections system can make a business much more viable in the long-term by reducing losses from uncollected debt. For companies that would prefer an alternative to cutting their losses with a collections agency, they are necessary and invaluable.


Street Talk

No comments present
You May Also Like
Debt Consolidation Loan Strategy
Are you one of many Australians who have reached the end of the year to find that your credit card debts are spiraling out of control and you are struggling to meet the minimum monthly payments required by the credit providers? This situation can be attributed to the fact that…
By: Singh in  Finance  >  Debt Consolidation   Feb 06, 2016  
0
  Likes: 0

Debt Consolidation: Is it the Solution to Paying Off Debts?
Handling debt is always challenging for several people. So when there are ads that express that you could be debt-free and get lower monthly bills, the first thing that comes to your thoughts is that this may be the solution to getting out of debt. It seems that it's a…
By: Jay20 in  Finance  >  Debt Consolidation   Jul 01, 2015  
0
  Likes: 0

Relief from Debt with a Consumer Proposal
Debt can hamper your future and prevent you from achieving your dreams. Everyone passes through a rough time financially, whether because of businesses failing or paying for the hospitalization of a loved one. There are a few ways you can make the payment terms of your debt favorable, you can…
By: Imee Candyline in  Finance  >  Debt Consolidation   Jan 08, 2014  
0
  Likes: 0

How Accounts Receivable Management Debt Collection Software Tools Can Help
An effective program can enable the company to realize quicker and earlier collections of any outstanding payment through responsive execution of the software. The AR management software provides speedy evaluation to identify the best effective strategy for collecting the debt, using the lowest cost method available. The AR department’s negative…
By:  in  Finance  >  Debt Consolidation   Dec 02, 2013  
0
  Likes: 0

Tax Debt In Dallas Tx: Never Be Without An Attorney
The IRS does not make tax reporting easy, particularly if you own a business, or have multiple incomes. Keeping detailed and accurate records is time consuming and complex, and you can end up owing money, no matter how hard you work to prepare. You can deal with tax debt in…
By: Dennis Colon in  Finance  >  Debt Consolidation   Aug 04, 2015  
0
  Likes: 0

Things To Consider For Debt Consolidation Loan
Credit cards are widely used by most people in our society. It has become a common habit which has put many people in difficult situations as well. The sad part is that people do not carry cash with them as for they consider credit cards their useful assert. People use…
By: Andrew Jhon in  Finance  >  Debt Consolidation   Dec 03, 2013  
0
  Likes: 0

How to Avoid Defaulting on Student Loan Payments
Colleges in the United States now have to pay penalties for extreme student loan default cases. This is in reference to an article published by the ‘New York Times’ in July of 2014. According to the new regulation, colleges that have default rates of 30% or more in a year…
By: Nick Stanitz-Harper in  Finance  >  Debt Consolidation   Aug 26, 2014  
0
  Likes: 0

Consolidating Debt How To Actually Go About It?
How To Consolidate Debt To consolidate debt can be a great option for those who are working their way out of debt. The goal of this type of consolidation is to put all payments under one name or under one account so that individuals will only have to pay one…
By: Renardj in  Finance  >  Debt Consolidation   Jun 23, 2012  
0
  Likes: 0

Debt Consolidation and Management
If your current issue is giving you feelings of uncertainty leading to fear and sleeplessness as a result of the huge debt you owe, I think it is time to enroll in a debt consolidation and management plan to see you through your difficult situation. But before you plunge into…
By: Jerome Kesslar in  Finance  >  Debt Consolidation   Jan 03, 2011  
0
  Likes: 2

How To Avoid Bankruptcy with Hard Money Commercial Loans
When you are down with suffocating debt, you might feel bankruptcy is the way to lift you up on your feet again. But, you will not want to consider bankruptcy because of the risk of having it stay up to a decade on your credit report. Of course, bankruptcy will…
By: Reed Cambpell in  Finance  >  Debt Consolidation   Dec 29, 2010  
0
  Likes: 0

Trapped In Payday Loan Debt?
Did you know there are millions of people that are stuck in the payday loan trap? First - What Is A Payday Loan? Right now many folks do not have the financial resources available to them when something out of the blue pops up – this could be an unexpected…
By: Leo E in  Finance  >  Debt Consolidation   Jan 25, 2013  
0
  Likes: 0

Ohio State Payday Loan Laws Are You Aware Of the Traps?
Ohio payday loan laws, are you aware of the traps? This state has many areas to look out for. If you use these services, there are a few things you will want to be aware of. Trap number one: This state allows payday loans up to 6 months and does…
By: Shawn Lee  in  Finance  >  Debt Consolidation   Dec 22, 2012  
5
  Likes: 2

What You Need to Do When You Contact Mortgage Brokerage Firms In Toronto?
If you are in the 90% population of the world, you will definitely be focusing on your earning sources and how to increase your earning on regular basis. As one of the richest men alive on Earth says that people should not remain dependent upon one income resource rather there…
By: cWil147CaR in  Finance  >  Debt Consolidation   May 25, 2015  
0
  Likes: 0

Payday Loan Debt Consolidation Assistance
Before I share with you the help that is available to you if you’re trapped in payday loan debt, I came across some very interesting information. Did you know every year over 12 million people in the United States use payday loans, and a Pew’s survey found that 5.5% percent…
By: Leo E in  Finance  >  Debt Consolidation   Feb 23, 2013  
0
  Likes: 1

Help For Payday Loan Debt
If you’re reading this article I’m pretty sure I know your story: Your life was sailing along with no real big ups or downs and then out of the blue a financial problem popped up. From everyone I have talked to it seems this financial challenge is usually a medical…
By: Leo E in  Finance  >  Debt Consolidation   Feb 21, 2013  
0
  Likes: 1

Article Views: 793    Report this Article