As a small business owner, you depend on your cash flow to cover all the expenses related with operating your business. With out adequate cash flow, you may find yourself struggling to pay your employees, your vendors, your suppliers, and even your lease. Negative cash flow can seriously impact your business to the point that it may even force you to go under.
One of the best ways to ensure positive cash flow is to keep your clients on top of their invoices and encourage them to pay on time. Unfortunately, many customers not only fail to pay on time, but may even issue you bad checks that end up bouncing when you try to cash them at the bank.
In cases like these, you will want to first get in touch with your customers to inform them that their check did not go through. Many times, this is an honest mistake that was never intended to be made, in which case the customer may willingly pay in another way to make sure you get the money you rightfully deserve.
Other times it can be downright difficult to get your customers to pay up, which will force you to have to take different measures to get your money.
The good news is that you can partner up with a collection agency who will be able to help you recover the funds that didn’t come through because of a bounced check. Your debt collector will get in touch with your customers via letter or phone call and attempt to convince them to pay back what they owe. If this fails, the small business collection agency will look even deeper into contacting them by using computer software and even going so far as to using a private investigator.
Collection agencies may also conduct searches for a debtor’s assets, including things such as their bank accounts, to determine the person’s ability to repay. Any delinquent debts may even be reported by the debt collector to the credit bureaus to entice consumers to pay back their debt, since delinquent debts can be very damaging to a person’s credit score.
Collectors agencies may also get in touch with delinquent borrowers who already have had a judgment made against them, which means the court has ordered the individual to pay back a specific amount to a certain creditor. Even if a creditor wins a judgment, it can be challenging to collect the funds. Creditors hire collection agencies to do this work for them, which can involve putting levies on the debtors’ bank accounts or cars, garnishing their wages, or even placing a lien on their home.
When your business is suffering because of customers issuing bad checks, a collection agency can be your greatest ally in getting back the money you deserve and need to keep your business in operation.