Carrying out proper debt collection management is essential for all businesses. This is more evident in exceptional circumstances like the present, where cash flow is the focus of any company and managers and owners realize its importance for business survival. Often, this task becomes laborious for many of them, who have to deal with clients who fail to meet their payment commitments, leading to financial problems for their business. This can affect their growth, as sometimes they must resort to alternative financing sources to continue existing and, in the worst case, can be dragged to closure due to lack of liquidity. For this reason, it is very important that every company has a debt collection policy, implementing methodologies that allow it to be more effective and, consequently, avoid the serious problems that delinquency entails.
The origin of a non-payment can be due to various reasons, and it is crucial to have it identified to personalize the negotiation for each case. It is not the same to deal with a debtor who has not received the invoice, one who is facing difficulties, or another who intends to evade payment. It is important to note, therefore, that unpaid debts do not always occur due to solvency issues. Documenting the debt and gathering all the information that certifies the outstanding amount is essential to start managing its recovery. The debt collector is responsible for identifying the type of debtor to define which strategy to follow to achieve success in the fastest and most beneficial way possible.
It is fundamental that every company has full control and knowledge of the debt collection cycle. Only then will they be able to plan and act in advance, minimizing potential problems, especially considering that time is a key factor that does not favor the creditor. In the face of the expiration of a debt, there is nothing to do. The debtor is legally exempt from the obligation to pay. Hence the importance of the debt collector, whose actions can interrupt this expiration.
There is a proverb by Sun Tzu that says, "The supreme art of war is to subdue the enemy without fighting." Applied to debt collection, we could say that the art of collecting is to achieve payment without confronting the debtor, because efficient management translates into saving time, money, and a greater credibility and better image for the company.