Financial viability is critical for the success of small businesses. When outstanding invoices become unpaid invoices, hiring a professional and reputable third-party collection agency can help business owners recover lost income from past-due accounts.

According to the U.S. Bureau of Labor Statistics, approximately 20% of small businesses fail within their first year and 50% fail after five years in business. One of the primary reasons that most small businesses fail is lack of working capital. That’s why hiring a professional collection agency can be part of a successful business infrastructure. For a small business with limited resources and staff, the debt collection process can be overwhelming. By leveraging the strategic and compliance-driven services of a reputable collection agency, small businesses can eliminate the stress and hassle of collection efforts, increase recovery rates, and improve bottom-line results.

Hiring a professional collection agency to manage your accounts receivable can increase your cash flow and help strengthen your business. Here are 5 reasons that a small business should hire a professional collection agency. 

1. Timely & Successful Recovery

When it’s time to resolve accounts receivable, time is of the essence; the longer you wait to recover money that is owed for goods delivered or services rendered, the less likely you are to receive payment and resolve the account in full. Fortunately, professional collection agencies understand the subtle nuances of debt collection regulations, statutes of limitation, and communicating with consumers. Leveraging the expertise of professional collectors gives your business a significant increase in the odds of successful recovery that can drive increased revenue for your business.

Working with a collection agency creates a sense of urgency and drives consumers to pay faster and make more payments. They are more apt to work out a realistic payment plan that resolves the debt in full. In addition, working with a third-party agency helps businesses to preserve the original customer relationship, increase customer satisfaction, and build repeat business.

2. Legal Compliance

Debt collection is highly regulated with complex legislation that continues to evolve. It can be difficult for small businesses to stay up-to-date with the changing dos and don’ts of the collections industry. There are many federal rules and regulations surrounding debt collection and specifically, consumer interaction. Hiring a professional collection agency helps you to avoid putting yourself and your business in a compromising situation.

Collections professionals are highly trained and adhere to the rules and regulations that govern the collections industry. Collection agencies invest heavily in the continued education and professional development of their debt collectors to ensure that they work ethically and compliantly with clear communication and transparency. They have a deep understanding of the Fair Debt Collection Practices Act (FDCPA), how the statutes of limitations vary from state to state, and different rules that can affect how and when businesses can attempt to collect a debt and/or take further legal actions. Small businesses don’t have to be experts in all of these critical areas; instead, you can hire a collection agency that is.

3. Technology

Debt recovery has many steps that require meticulous documentation. Professional collection agencies employ specialized technology and tools that streamline the documentation and collection processes that are not only required for legal compliance but also necessary for developing collection scoring and recovery models that can help predict the success of repayment.

With a deep understanding of these scoring models (the probability of an account holder’s willingness and ability to pay), agencies can quickly outline actions that can be taken to focus on the right accounts, maximize recovery, and improve cash flow. 

4. Flexibility

Flexibility may not be the word that is most associated with debt collection, but one big advantage of working with a professional debt collection agency is the ability to choose the strategy and fee schedule that fits your small business’ budget.

With a variety of fee schedules and different options for collection strategies, professional agencies can deliver the flexibility that small businesses need to succeed. Accounts receivable portfolios can be analyzed and segmented to better understand the best recovery approach for each account type.

5. Turn Focus to Your Core Business

Working with a professional, licensed third-party collection agency allows you to reallocate internal resources from chasing overdue funds to strengthening your infrastructure. Most small businesses don’t have staff who understand the intricacies of debt collection or have underutilized employees who have the time to invest in learning the processes required to compliantly pursue delinquent accounts. By contracting a reputable collection agency, you can confidently focus on your core business and the tasks that will drive revenue, knowing that trained professionals are pursuing the recovery of your accounts receivable.

Where to Turn for Help

When it’s time for your small business to turn unpaid invoices into real revenue, turn to Orion Capital Solutions. We understand the critical importance of compliance and strive to build positive relationships with consumers through honesty, integrity, and professionalism. Our team works hard to recover your missing accounts receivable while preserving your reputation and protecting your brand. Learn more on our website or call us at 855-399-3250. 

About Orion Capital Solutions

Orion Capital Solutions is a professional, nationally licensed collection agency located in Orchard Park, New York. Founded in 2018, we provide outstanding services to our clients and consumers through the integration of technology and an experienced and compassionate team. We have over 30 years of experience in delivering exceptional results for creditors and realistic solutions for consumers.