Financial Services

Financial+Services

The Pros And Cons Of Using Third Party Collection Agencies

For businesses and other financial organisations these collection companies seem to be a life safer. It is said that most agencies have been able to help businesses reclaim their moneys which would have been written off if not for the efforts put in by these companies. Though they seem to get a bad reputation, they serve a greater purpose when it comes to businesses.Businesses opt for a first party agency or a debt collection agency Sydney in the earlier stages of the collection process. They are usually subsidiaries or different sections of the same organisation trained at collecting moneys owed while maintaining positive relationships with their customers. Third party agencies are outside organisations that are paid when they collect the moneys owed by another company such as a bank. While there are benefits of using these organisations, it is a good thing to understand both sides of the story.

Pros

Saves time: hiring an outside firm to do the retrieval saves up a lot of time and resources for the organisation to focus on their core business. Especially for small businesses this can be a bonus because if you try to do it yourself you will be spending a lot of time sending emails, making phone calls and leaving messages, which in most cases would get ignored or not acknowledged.

They collect outdated debt: most individuals may not respond to efforts to collect moneys owed when the time line is extended. However an experienced professional such as a debt collector will have the expertise and the assertiveness to keep pushing to make the retrieval made. Research indicates that these professionals have a higher success rate in collecting outdated debt.

Technology: these professional organisations now days use many advanced forms of technology to track debtors and communicate with them. These mechanisms allow them to maintain constant and consistent communication with the debtors so as to make their collection efforts successful.

Cons

Disrupted client relations: it is evident that a client referred to a third party agency is unlikely to ever return to you for business. This can sometimes result from the third party employees not following correct protocol, regulations or not being respectful. Sometimes they can be rude in their approach and really put off clients. It is important to remember that long standing clients might be going through financial troubles but they can always come back positively. Therefore a tarnished relationship can be a loss for your business in the long term.

High fees: the agencies will charge about 20 – 50% as fees for the services they have rendered. This can sometimes be very high for a small business.

Among the different tasks a company has to complete in order to move forward in the world as a successful firm, there are some tasks which appear above the rest because of their importance. One of them happens to be the keeping financial records of the dealings of the company. Even a small company has a number of transactions which need to be inserted into the books on a daily basis. Therefore, financial record keeping is never an easy task to go through.As a result of the complicated nature of keeping financial records you need to have someone experienced in charge of the task. An experienced professional can handle the matter successfully. However, if you do not have such an experienced professional in charge of handling company financial records there is the possibility of facing a number of problems.

Problems with the Government

Every company has to go through a proper audit. During that inspection of the financial records of a company the authorities can find any problems with the financial record keeping if there are problems to find. If they actually find out such problems with the way you keep company financial records they can take legal actions against you. That is not going to be something easy to solve as you will then have to get lawyers involved in the matter too.

Losing Valuable Time to Solve Problems

Though financial record keeping can be hard for someone who does not have any kind of knowledge about that task, it is never a hard task for someone who has a good knowledge about the task. However, there are still going to be companies which are not going to pay enough attention to this matter and hire an experienced person to manage this task. As a result, if a problem occurs with these financial record keeping you will have to spend the valuable and limited time you have to solve those problems instead of engaging in more profitable actions for the company.

Losing Trust

One of the biggest problems you have to face with the legal problems which arise due to financial record keeping issues is losing the trust of everyone who deals with your company. Your customers will start doubting you. So, will your employees.

Taking Too Long to Complete the Work

Whenever you are not using an experienced professional such as a tax agent in Chatswood to handle matters you are going to spend too much time to complete the work. So, you need an experienced professional to handle this task.