“I have a lot of small invoices in my business that have not been paid. What should I do?”
This is a common question our team gets from small and large businesses regarding lower dollar amount invoices that remain unpaid.
Many businesses think it’s not worth the effort to implement collection activity on small invoices. But what if we told you that focusing on these in your business could add up to significant amounts of money recovered for your business.
Many businesses choose to write off the smaller unpaid invoices because they believe it’s a hassle to collect those amounts. But if you add that up over the course of the year, you’ll probably be shocked at the amount of money you left on the table.
Learn the reasons why collecting on smaller invoices over time can lead to a big difference in your bottom line.
Reduce the burden on internal resources
Once your follow-ups and statements are sent, it just doesn’t make sense to use internal resources to chase down all these small invoices. However, using a collection agency that offers a low-cost debt collection solution is a smart move that will immediately help you reallocate your internal resources. Once an invoice passes the 90-day mark, it can take your team much longer to recover that money.
Expertise in collecting smaller invoices
Collection agencies specialize in recovering debt, even if it’s a small amount. A reputable collection agency has trained professionals and the experience to pursue those payments more effectively than your organization. A consumer may not be paying a small bill because of a dispute and a skilled debt collector can increase the likelihood of recovering that outstanding amount, even if it is small. That done repeatedly adds up to a lot of money into your organization.
Less stress over cash flow
If you have 25 or 30 clients that have not paid you, even if it’s a small amount, that adds up over time and it impacts your cash flow. For a small business owner, that can be stressful. For a CFO of a large organization, the stress remains because those numbers can be even higher if ignored. That’s why it is crucial to continue collection activity for small invoices because it is crucial for maintaining your operations, paying your own bills and investing in growth opportunities.
Deterrence of additional late payments
When your customers know that even a small overdue invoice might end up in collections, they will be more likely to pay on time in the future. This can further establish your payment expectations of prompt payments. While many consumers have a legitimate financial challenge or even a dispute with the service, some consumers may just put off smaller bills. Using a collection agency for small amounts continues to set your payment expectations.
Maintaining positive customer relationships
We’ve stated this numerous times in various blogs and videos we’ve done on debt collections, but the fact remains, using a reputable debt collection agency can help maintain that positive relationship you have built with your customer. This is evident when they are going through a financial challenge, and they need assistance. A professionally trained debt collector can help your customers navigate a challenging time in their life.
A cost-effective way of building cash flow
The true benefit to your business of sending smaller invoices to a collection agency is it is a cost-effective method of maintaining positive cash flow. Especially when you utilize the services of a low-cost collection agency. When you do this, you will find over time that your cash flow has improved and the return on your investment is well worth the effort.
Need to discuss your debt collection needs with APR? Call (800) 711-0023 or use the form below to request more information.
