Putting into practice debt recovery strategies ensures effective debt collection if the right technology is applied. In this regard, there are new approaches to tackle the most significant challenge that companies have been facing over the past year: failure to receive payment on time.
What is debt recovery?
Debt recovery is a process initiated by a company when it needs to collect debts arising from a client’s failure to make timely payments.
The actions taken to collect debts are diverse and have evolved over the years. New techniques were developed with advances in technology that have improved the debt collection process, making it a simpler and automated task.
Despite that, debt recovery can be an unpleasant process for the parties involved since it entails taking measures to collect from individuals who are either unwilling or unable to make payments.
The problem regarding delinquency and debt recovery
The company decides when to start the process to collect debts and it is the company’s responsibility to stay informed about the payment status of its clients.
Tracking the collection management is essential to ensure the financial health of the company since failure to obtain payment for a service or product provided is considered to be another challenge that companies face.
Types of debtors
The types of debtors that default on their payments and from whom companies must recover debts have different reasons for their default.
Consequences of delinquency: debt recovery
It is more than evident that avoiding the failure of clients to make payments is crucial for any company, as it is a breach of the commitment between the seller and the buyer. Besides the moral and ethical burden such failure represents, it also has financial consequences that may affect the very existence of the company as it will need to initiate debt recovery processes.
The breach of the terms of payment agreed may result in an imbalance of the company’s accounts, which affects its financial stability, especially if it relies on its income to produce its products or to purchase stock.
How to improve debt recovery
Is there a way to overcome this issue? The answer is yes. Thanks to technology, solutions have been developed for debt recovery strategies that companies can employ to face delinquency. However, it is highly advisable to implement these strategies from the beginning to avoid these bothersome problems.
Strategies to collect debts: how to recover debts
The main focus on debt recovery management is to put all efforts into preventing debts from having to be recovered. In other words, the focus is on defining strategies that enable a smart management of relationships with clients. By doing so, long-lasting and sustainable relationships will be built, which will allow you to anticipate an undesirable debt collection.
When it is impossible to avoid this situation and there is no other choice but to initiate a debt collection from a client, there are several ways to address it.
The new solution
For small and medium-sized businesses and self-employed individuals
You decide, out-of-court or judicial claim, and if an out-of-court agreement is not reached we advise you on the decision of taking the case to court. Don’t wait any longer! The older the debts get, the less they’ll pay you. Riskma Solutions is your solution.
Out-of-court debt collection
We are specialists in debt management and in managing accounts in arrears. We have achieved superior results of recovery of debts, and lowered as much as possible the accounts uncollectible, ensuring clients the oversight and control of processes using reports and customized performance indicators.
We manage the whole cycle of the accounts in arrears achieving high productivity without associated risks, through compliance policies and processes that are in constant update and have passed the most demanding, internal and external, audits.