Debt in a Crisis

8 Reasons Paying Commission on Overdue Receivables is Plain Brilliant

Business Strategy  |  3 min read

The biggest barrier to using a collection agency is usually that as a business owner, you’re naturally resistant to giving up part of what’s owed to you.

That’s understandable.

You’ve worked hard for that money. You fully deserve it. You have your costs and overhead to pay. 

Here’s the thing: you ain’t getting paid.

If receivables simply rolled in as expected, you would not be reading this article. Times are tough, and your customers are struggling too.

According to the latest statistics, many of them are in BIG trouble. Bankruptcies and proposals are on the rise, with entire industries and business models at risk of collapsing. There are numerous good reasons why MetCredit clients hire us to collect, all of which are intensified by the current crisis.

Here are 8 of them worth considering:

  1. You can’t afford bad debt. As much as you’d like to have all the money billed, the reality is that a percentage of your receivables will end up a bad debt write-off. During times like this, that percentage will be at its highest ever. As debt recovery experts, we’ve done the math and can say conclusively that recoverability erodes over time. We’ve even created a debt recovery calculator based on real-world data.

    Bottom line: the longer you delay sending overdue accounts for collection, the less money you will recover.
  2. Your reputation is important. One of the toughest things about collecting overdue accounts internally is it creates tension between your business and its hard-won customers. Bringing in a collection agency enables the recovery process to happen at a distance, minimizing risk to your reputation and customer base. 
  3. We’re the experts. Professional debt collectors are highly trained, and at MetCredit our agents are experts at Solution-Oriented Recovery™, a proprietary methodology we developed to help your customers prioritize your bills—and uncover creative ways to pay you immediately. 
  4. Peace of mind is precious. Once you send a file to collections, you can stop thinking about it endlessly and move on. We’ll keep you up to date, and you’ll be surprised how quickly we collect.
  5. You have much better things to do. Seriously, collecting money is not your strength. You earn money in specific ways, and anything else becomes a costly distraction. When you send a file to your collection agency, you can focus on earning new money by playing to your real strengths.
  6. It’s excellent for morale. Marking past-due accounts as “Paid” feels good. The alternative, making fruitless collection calls (or having your bookkeeper, receptionist or worst of all, sales reps, make them) is painful and devastating to morale. 
  7. It beats the heck out of suing.  Your customers know you don’t want to follow through with threats of litigation. It’s expensive, risky and s-l-o-w at the best of times—and these are the polar opposite of the best of times.

    If litigation is necessary (and only as a last resort), fees apply but our in-house legal team keeps costs much lower than going through a lawyer.
  8. You get paid faster NEXT time. When customers fail to pay as promised, they are sending you a strong message: you aren’t on the priority list. They are likely paying other bills, payroll, rent, taxes—but not YOU.

    Sending a file to collections shows you take customer commitments as seriously as your own, and those customers will remember to pay you on time in the future. You owe it to your employees, your dependents and yourself to stand up for your company!

When you compare the investment in hiring MetCredit to the cost of bad debt, harm to your reputation and team morale—plus the value of time better spent and improved future cash flow—it’s a no-brainer, isn’t it? 

There are many other reasons too, including how we make it easy to send account files through our uniquely friendly online debt collection app. 

Reach out now, and feel like you’ve instantly gained a shipload of IQ points!

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Brian Summerflet Author: Brian Summerfelt

President and CEO of MetCredit, Canada's top-performing consumer and commercial collection agency

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