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Options for managing business debt recovery

The task if business debt recovery is something that companies of all sizes have to deal with at one time or another.  When the need to collect on outstanding debts comes to pass, there are several strategies that may be employed.  Here are some examples.

One approach is to mange the business debt recovery operation internally.  This method calls for assigning personnel, usually in the accounting department, to focus a certain amount of each work day on collections efforts.  The benefit of this approach is that if successful, all the collected funds are received by your company, without the need to share any of the proceeds with a third party. a potential liability to this approach is that the amount of hours spent in the collection effort may offset a considerable percentage of the monies collected, especially if that employee's time could have been spent in endeavors that would have generated a greater return.

A second approach with business debt recovery is to place the delinquent accounts with a reliable debt collections agency.  The benefit here is that many companies will charge only a fixed percentage of the total amount collected on your company's behalf, even if it takes months to collect.  A possible drawback is you have limited control of the collection methods used, increasing the chances of the efforts adversely affecting your company's reputation.

There is no one right way to go about the process of business debt recovery.  Weigh the benefits and drawbacks of each approach, then decide which strategy is the best fit for your situation.  With a little luck, you'll collect the money and be able to focus on more important matters, such as winning new customers and generating new revenue for the business.

 

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