As an Entrepreneur, at What Point do you Choose to Hire a Collection Agency?

Being an entrepreneur can be lots of fun. Unfortunately, it can also be very stressful, for instance when your customers fail to pay their bills. Fellow entrepreneurs will tell you you’re not the only one this happens to, but it’s still very irritating when a customer is unable or unwilling to pay. Many entrepreneurs choose to ‘stalk’ those customers a little bit, but if they ignore your emails and phone calls, it might be time to call in the professionals. The professionals of a collection agency can help you out. But when is the right time to ask for their help? We’ll gladly tell you more!

Try to get the funds back yourself first

We always recommend you to try and contact your client first, when you notice an invoice hasn’t been paid. Sometimes it’s just a mistake – the invoice got lost, there was an issue at the bank … if it’s a regular client, you don’t want to jeopardize your relationship with them by sending a collection agency to their door straight away.

 

Nevertheless, if you notice that you can’t reach your client and all your emails bounce, it might be time to take the next step. If you want to keep growing as a company, you need to have a good cash flow and you need that money to pay your own bills or invest.

Hiring a collection agency

If you’ve decided to hire a collection agency, we recommend you to look at their reviews and/or ask fellow entrepreneurs about their experiences with collection agencies in your area. Once you’ve decided on one, you and your contact at the agency can decide on a game plan. Usually, the collection agency will send a formal reminder (Dutch: aanmaning) first. This will let your debtor know that you mean business, and often you’ll see that once a collection agency gets involved, a debtor pays quite soon.

 

Make sure you choose a collection agency that acts customer-friendly, especially if you might still work with the debtor in the future. You don’t want to totally lose your relationship. Credifin debt collection agency (Dutch: Credifin incassobureau), for example, proves that communicating in a friendly and yet very clear way is perfectly possible.

 

If needed, a collection agency can also take further action when the debtor also ignores your formal reminder. Often, the agency can hire a bailiff to seize assets if needed.

We wish you good luck in collecting your funds!