Why outsource collections?

In the modern business world, efficiency and specialization have become the watchwords of success and sustainability.
When it comes to managing debt collection, companies are often faced with a dilemma: should they bring the process in-house, or opt for outsourcing instead?
With the growing complexity of financial regulation and the need for a personalized approach, outsourcing offers a solution that not only protects outstanding receivables, but also simplifies in-house management by delegating the dunning and collection part.
Your in-house teams remain focused on value-added tasks that depend on their expertise.
What’s more, if amicable collection fails, specialized companies like Kreancia can provide certificates of irrecoverability, enabling VAT to be reclaimed.

Advantages of outsourcing collections

The choice of an outsourced collection procedure also sends a strong signal to debtors.
A reminder for unpaid debts sent via an external collection service creates a psychological break, encouraging debtors to come forward and regularize their situation.
This is where an effective debt collection strategy plays a crucial role, without undermining the business relationship established with receivables.

Professional expertise

Outsourcing debt collection provides companies with specific know-how that only specialized collection companies can offer.
As professionals, debt collectors are able to quickly identify the best strategies for amicable collection, significantly increasing the chances of rapid and effective recovery of customer receivables.
Such expertise translates into a better grasp of tricky cases and a mastery of legal frameworks, which is essential for navigating the complex web of collection procedures.

Save time and human resources

By delegating debt collection to an external company, companies can concentrate on their core business without spreading themselves too thin on tasks that require knowledge outside their expertise.
The added value here is twofold: not only do you avoid the costs associated with recruiting and training a collections department, but you also benefit from immediate expertise.
The time saved can be reinvested in growth initiatives or improvements to existing services and products, leading to greater customer satisfaction and a better market position.

Financial benefits: VAT recovery and certificates of irrecoverability

One of the undeniable advantages of external debt collection management is the recovery of VAT on bad debts.
In fact, as a collection company, Kreancia can issue certificates of irrecoverability. These allow the company to recover VAT already paid on unpaid invoices.
In addition to this, outsourcing can often reduce the costs associated with in-house collections, by taking advantage of optimized cost structures and more competitive rates than those of an in-house collection service.
These financial savings can then be channeled into other areas of the business requiring investment.

The outsourced collection process

Quick set-up for immediate results

Choosing to outsource your collections department brings immediate benefits.
As soon as the decision is taken, the collection company takes over the files, using its existing IT systems to resume action without delay.
The immediate nature of external intervention translates into a direct improvement in cash flow and a positive impact on the company’s accounts.

The impact of psychological breakdown on the debtor

The intervention of a third party, such as an expert debt collection service provider, has a significant psychological aspect.
Indeed, when an external collection service takes charge of a debt, the impact on the debtor is direct.
They realize that their creditor is taking the matter seriously enough to involve another entity.
This often prompts them to act quickly to rectify the situation.
Working with an external company sends out a clear message: all debtors are contacted, and no one is forgotten– an important factor in the dynamics of debt collection.

Legal procedures: injunctions to pay and others

When it comes to navigating the labyrinth of legal procedures, hiring a collections expert is a game-changer.
A seasoned collection company has the necessary expertise to navigate through the legal complexities, including injunctions to pay and other legal mechanisms.
This legal expertise offers companies invaluable peace of mind, knowing that their receivables are managed in full compliance with current legislation.
This knowledge not only reduces the risk of non-compliance and the associated costs, but also increases the likelihood of a favorable outcome in collection proceedings.

Choosing the right collection partner

The idea is not just to recover the funds owed, but to choose a partner who can find the best procedures for recovering the debt, while preserving customer relations, even in complex collection situations.

Criteria for selecting a collection company

Selecting a reliable and efficient partner is no easy task.
It’s essential to turn to an entity that not only fully understands the nuances of your company’s business, but also offers :

• a proven track record of success in out-of-court and in-court debt collection.
• an approach adapted to the size and structure of the company’s outstanding receivables.
• a balance between rigorous debt collection and the preservation of the commercial relationship.

 

The importance of customer relations in debt collection

Despite the imperative of collection, it is vital not to lose sight of customer relations.
A collection company must therefore operate with sensitivity and tact, so that collection actions contribute to maintaining business relations rather than damaging them.
Effective, respectful management of customer receivables means striking a balance between firmness and respect, ensuring that the recovery of funds owed is carried out without hampering future business opportunities.
In conclusion, it’s crucial to choose a partner who knows how to collect a debt in a way that is both effective and in keeping with your company’s image and values.   Outsourcing debt collection is not just a convenience; it’s a well-thought-out strategy aimed at optimizing financial management and preserving solid business relationships.
Debt collection then becomes an action that minimizes risk and maximizes results for your company.
By entrusting this task to dedicated companies like Kreancia, businesses not only benefit from a more efficient debt collection service, but also ensure the preservation of customer relationships.
The advantages of such an approach are clear: a faster collection procedure and favorable outcomes, without the inconvenience and distraction of in-house procedures.