The Issue with B2B Collections

  • Anil Kanda
  • 29 Oct, 2013

A healthy Cash flow is integral to any business; and even more so for the smaller business in which creating sales is only as (if not more) important as the collection. Unsurprisingly, according to the Small Business Survey 2012, 48% of small businesses regard Cash Flow issues as their biggest obstacle to success with 56% of businesses regarding late payments as the biggest cash flow challenge.

In the lifespan of a business chasing late payment’s is unavoidable, however when the late payments turn into bad debts this can throw a small businesses survival into jeopardy. Businesses can easily get bogged down by chasing late payments and succumbing to the usual debtor excuses and empty promises. Delinquent accounts can cause a tremendous amount grief to smaller businesses owners, if their debtor has gone out of business, a business owner sometimes waits too long to collect the debt subsequently reducing their chances of recovery. When a business only has a one large single debtor, the debtor going out of business can be especially problematic. As it is often the case, the debt can not be recovered in house and then referred to the court which can be a slow and expensive process. To avoid the same fate as their debtor a Commercial (or Business to Business) Debt collection agency can be a viable solution for ‘irretrievable’ collections.

Debt Collection Agency can be a lifeline for any businesses irrespective of size, they will take the bias and guilt out of the equation and separate the “can’t pay” from the “won’t pay” debt that were previously ‘unrecoverable’.  A business can partner with an experienced and professional collection agency and make recovering Commercial debts quicker, simpler and substantially less expensive than going through the court system.

With commercial collections, the collection agency can experience certain set backs, namely playing the counselling role between business and debtor. On the one hand a business owner may get impatient with a debtor and will want overlook legal practices to get back what is owed, it is then up to the debt collector to reassure, sympathise and ultimately diffuse the heated situation whilst promptly recovering the money owed.  On the other hand, if the business has afforded the debtor a substantial amount of time before enlisting the help of a debt collection agency then it is likely to be the case that they wish to maintain a good relationship with the debtor. The issue then for the debt collector is trying to maintain that relationship. Either way Business collections is no easy task, consumer collections-  though wrapped up in tighter regulations- can be a more straight forward process as the majority of the negotiations are done either over the phone or face to face. Commercial collections subscribe to the norm of written correspondence, which ultimately takes more time.

Ashley Business Finance can enable a DCA to quickly recover commercial debts.  Ashley will fund a debtor on behalf of a Collection Agency and their Client at no risk or cost to the DCA or the Client.  Ashley will contact the debtor and offer them funding, if agreed Ashley will make an arrangement with the debtor to pay the DCA and the Client in full using part of the funds raised. All Ashley require from the Collection Agency are  the contact details of the debtor and amount owed, Ashley then endeavour to pay the debtor as quick as 7 working days and in turn release the funds to both DCA and Client. Ashley also pays a referral fee to the DCA when a Commercial debtor takes up a funding facility with Ashley.

Ashley hopes this new product will help Collection Agencies to smoothly recover overdue payments and exceed their client’s expectations.