May 07, 2013

Collection professionals crucial to flow of commerce

The collection industry plays an important role in the U.S. economy, aiding businesses in collecting past-due accounts. More than 400,000 professionals were employed in the industry in 2010, according to the U.S. Bureau of Labor Statistics.

A good collection agency can have a huge impact on a company by increasing its cash flow, the lifeblood of business. For example, without adequate cash flow, companies can lose out on discounts from suppliers, which are gleaned by paying early. And then there’s often the onerous expense¬†of paying interest fees. A business owner must keep that life-blood of cash liquidity flowing through the business. Borrowing money to cover a cash shortage due to late paying customers often proves especially egregious for a business owner, because it’s essentially an avoidable expense.

We all know what a sludge-like slowdown in the flow of cash looked like post-2008. That’s when a liquidity crisis virtually shut down the U.S. economy. On a micro scale, a liquidity squeeze is just as devastating to a small business owner.

Many businesses weigh the cost of recovering delinquent debt. Some find it’s healthier to cross that psychological threshold and accept that it’s time to bring a professional in to unclog those cash-flow pipes. Yes, there will be a fee for the service, but the cost is well worth the benefits of getting paid.

People and companies that pay late waste other people’s time. Time is money. And that’s why collection agencies are vital to the small business. Spend your time building new business and let the collector deal with those past-due accounts. You’ll be glad you did!

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