7 Reasons Why Bad Payers Hate Debt Collectors
It’s a rare business that doesn’t have at least a few outstanding invoices that just seem to never get paid. One way to recover at least a portion of the money from those bad debts is to refer the debts to a business debt collector. Even just mentioning the possibility of a debt collector entering the picture could prompt your slow-paying client to reach for his or her cheque book. After all, bad payers HATE business debt collectors…with good reason.
Why bad-paying clients hate debt collectors
1. They can’t delay anymore with excuses. Professional debt collectors aren’t nearly as likely to accept repeated excuses for not paying.
2. The debt collector will make them pay. A debt collector’s primary business is getting bad payers to settle their invoices. That generally means that they have more time and effort to devote to the collection process.
3. Legal action is imminent. The next step after turning over a debt to a professional debt collection agency is legal action.
4. It is going to cost them more money. Legal action will virtually always end up costing your client more than if they simply paid the bill, since there are recoverable costs and interest that will be added to what they owe if legal action is commenced.
5. The debt collectors come after them immediately if an arranged payment is missed. Professional debt collectors will chase bad payers down immediately if any arranged payment is missed. There is much less room to negotiate with a debt collector.
6. Any Judgment against them will affect their company’s potential for new credit. If legal action is commenced and a Judgment is issued against them personally or their company, it will likely affect their or their company’s ability to obtain future credit for things like buying real property, inventory or expanding the business.
7. They can no longer use the promise of more work for client as a bargaining tool. Once the debt has been turned over to a professional debt collector, the client-business relationship has likely been irreparably damaged. Offering more business to the company in return for a late payment will be of little to no interest to the debt collection agency.
If your company has been late paying invoices to your business partners due to a business slow-down or other unforeseeable circumstances, it’s wise to talk with your supplier or service provider and work out a payment arrangement. Ignoring the debt will likely cause your partner to be turned over to a professional debt collector. As you can see from the points outlined above, facing a debt collector is rarely advantageous to you or your company.