Partnering with a debt recovery team can help your business grow and stay competitive
Originally published: 03.01.09 by HVACR Business Staff
Finding a strong team to partner with will help you improve accounts receivables, while also helping you chase new business.
Owning a heating, ventilation, air conditioning and refrigeration business today is more challenging than ever. The uncertain economy is leaving even the most creditconscious consumers struggling to make ends meet and is definitely taking its toll on small business owners. Since most HVACR companies are only equipped with a small staff routinely called out for “emergencies,” following up with accounts receivables and billing in a timely manner is not always feasible. Erratic schedules and overdue accounts leave most contractors struggling to find ways to provide reliable customer service while keeping their businesses growing to stay competitive.
If a number of customer accounts are overdue, it may be helpful to seek collection assistance from a third-party agency. However, there are many myths and misconceptions that prevent small business owners from employing a debt recovery team such as:
• Alienating customers
• Loss of control over accounts
•Hiring a collection agency is too expensive
Even the most reputable companies and consumers run into financial difficulties. When your company finds a highly regarded third-party debt resolution agency that is a good fit, you will see a dramatic increase in your accounts receivables while also retaining customers. If your business is having difficulty collecting an increasing amount of outstanding debt from customers and struggling to find the manpower to chase those overdue accounts, it is time to find help. Here’s what to look for in a third-party resolution partner.
Look for a debt resolution team that acts as early as 30-days past due on overdue accounts. The more time that lapses, the less important the request for payment seems to customers. Since most HVACR companies are unable to provide quick collection action in-house, turning to an outside source for help is vital in collecting outstanding debt and maintaining healthy customer relations. A debt recovery team who acts early in conjunction with a respectful mail-based system generates the greatest success. Customers are more likely to respond to this approach, as they perceive it as kinder and less threatening.
Maintain Account Control
HVACR businesses prolong seeking help with overdue accounts from an outside team because they fear they will lose control of their business and customers. A successful third-party team will offer your company full disclosure, which gives you the ability to manage your accounts receivables process through a web-based system anytime day or night. This method keeps you in control of your accounts, updated daily, at times that meet your hectic schedule.
Customer-driven technology allows you to enter and remove accounts by logging into the agency Web site, giving you complete control of the process and full access to the account activity. A web-based system speeds the process and strengthens the early intervention approach.
At a time when everyone seems to be tightening their financial belts, hiring a third-party for help may seem like an unnecessary expense. However, there are teams that offer a flat-fee system, meaning you pay a fee, for example, of $10 per account, regardless of the dollar amount being collected. This system is more appealing to many contractors and makes a collection team more affordable. A flat-fee structure appears to achieve greater success than typically seen in the industry.
Risk for Reward
Sticking with old and ineffective collection methods in today’s economy will not help your company succeed and may cause your customer relations to suffer. Breathe new financial life into your HVACR business by finding a third-party debt resolution team that meets your company’s needs and treats your customers with respect and diplomacy. Debunking the myths of working with a third-party team will increase your company’s profitability and your longterm internal methods of collecting outstanding debt.
Business owners are often hesitant to try something new, fearing that unknown methods may prove risky and have worse results than current practices. An effective third-party team will follow a business model that looks to retain customers. The goal is to have a strong team behind your business, helping you improve accounts receivables while also educating you on how to spend time chasing new business, not past due accounts.
Articles by HVACR Business Staff
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