The Impact of Late Payments on Business Growth

There’s nothing more basic in business than the need to make money. Aside from growing annual profits, companies need to pay for basic operating expenses, like wages and keeping the lights on.

Companies in different sectors have moved to a subscription model to streamline and basically automate monthly payments, so money arrives in a slow drip, but constantly. Whatever business model you opt for, collecting the money on time is essential.

Otherwise, problems trickle down if you ignore the problem or don’t hire a debt recovery service to intervene. Let’s check out some of the problems that arise when businesses don’t receive their money on time.

Angry Suppliers

Businesses have decisions to make when experiencing a shortage of funds and can’t pay all their bills. If they’re unable to cover their expenses for suppliers, they could get angry and become reluctant to do more business in the future. The last thing you want is a bad reputation to develop among suppliers.

It’s hard to quantify what damage a bad reputation can do for your operations, especially when the reputation is earned. Hiring professional debt collection services ensures your books are healthy so you stay protected from all the harms that can occur when suppliers or other B2B partners miss payments.

It’s salt in the wound when money that should rightfully be in your accounts already causes more damage to your operations. Summit Collects has an excellent track record, as we recoup nearly double the industry average in debts.

Disgruntled Customers

When some customers don’t pay what they owe, it can affect not just your daily operations but your reputation among the loyal customers who do pay on time. All the trickle-down effects non-collection can have shouldn’t push away your customer base, who have done nothing wrong!

But problems with suppliers can interrupt the ordinary workings of your business, which can impact services and goods. Handling disputes over debt in a practical, efficient way not only keeps that money in your business; it also prevents small problems from snowballing into much larger ones with a different segment of people you need desperately — customers.

If your company gets to the point where delinquent customers start pushing away the loyal ones who pay on time, things can spiral out of control very quickly. You’ve worked hard to create and maintain a customer base. Don’t let uncollected debts affect your churn rate.

Reputation Matters

Whenever solving a debt collection issue, Summit Collects leads with our PHD approach — preserve human dignity. Our goal isn’t merely to quickly maximize your debt payments. We also ensure that after the collection, all bridges are fully intact. 

Relationships and reputation are invaluable, and business and we’ll never jeopardize yours with our collection methods. Our ethical debt collection approach leads us to work with people in a way that genuinely helps everybody move forward.

We avoid all the ugly, underhanded tactics that are, sadly, sometimes rightfully associated with debt collection, like late-night phone calls, threatening or abusive language, robocalls, and others. Our trained, courteous staff insist on finding the right path to get you what’s owed without upsetting or distressing anybody else. We work in specialized, niche fields governed by specific laws, like HIPAA, and can guarantee compliance.

Debt collection should never come at the expense of angering people you need to keep doing business with, hopefully for years to come. For companies in all sectors, maintaining client relations is essential because relationships may take years to build, but they can be damaged overnight.

Deploying HR Effectively

Even when companies use their own personnel to collect debts, it isn’t necessarily the best use of their time. Human resources and other employees have important tasks to do and dispatching them to chase what should already be in your accounts may hold them back from accomplishing other central jobs.

Making matters worse, there’s no guarantee that HR personnel who attempt to recoup the debt will succeed! They might not, and even when they do, there are other things they could be doing that are more important.

Summit Accounts takes these tasks off their hands, so they can return to work where they’re most effective. We will improve your debt recovery rate by taking it over for you entirely, but we can also consult on best practices to give your internal processes a boost.

No two companies are exactly the same in this way, and we try to offer flexible services that meet any business’s needs. Many companies want to focus exclusively on looking ahead, so they hire us to collect all their debts. We can also work closely with your employees to understand the nature of your operations, work culture, and what issues you face before coming up with a plan to improve your internal processes.

Uneasy Employees

Any blockages relating to incoming money can severely impact a company’s ability to pay wages and salaries. Employees are the backbone of any company’s operations, so it’s impossible to overstate the importance of keeping them motivated and ensuring morale is high.

Any business that has trouble paying employee wages has a real problem on their hands. They’ll either need to pay them with money allotted elsewhere in the business or find some other way of patching up the holes in their budget.

There are other ways of keeping employee morale high, like providing a safe, exciting workplace in which they can grow and develop their skills. Offering ways for them to work remotely, when it’s mutually agreeable, is another. As with anybody else, ultimately compensation is employees’ primary motivator. Companies need healthy books so they can comfortably pay their employees.

Companies of all stripes know how crucial it is to grow profits annually and collect the money they’re entitled to. Everything from short- and long-term forecasting to paying operating expenses relies on having enough money to issue payments. If you’re struggling to collect debts, please don’t hesitate to contact the friendly and ethical debt collector, Summit A*R.