As a small business owner, you have many responsibilities. You have to handle everything from supply chain management to human resources and financial accounts. One of the most frustrating hurdles you may face as the boss is the lack of payment from a customer. In some cases, it can be tempting to simply write off bad debt and spare yourself the energy, time, and effort that debt collection requires. Here’s why you should hire a collection agency instead.

How Does Bad Debt Impact Your Business?

Every receivable you are unable to collect impacts your bottom line. When you add receivables to your books, they are considered assets. The idea is that they will become cash. If you provide goods or services and then bill the customer following delivery, you are technically acting as an unsecured creditor.

What many people don’t realize is that an unsecured creditor isn’t protected if the debtor files for bankruptcy. If you are dealing with a customer who is in serious financial straits and they go bankrupt, your business won’t be a "must pay" debt. The amount due will be discharged, and you legally will not be able to ask for the money going ahead.

What Can a Debt Collection Agency Do to Help?

If you operate your business using an accrual model of accounting, in which you only claim income as it’s earned, you can resort to writing off the bad debt. However, you can only write off receivables if you have concluded that they can’t be collected. You can’t write off the debt to get it off of your books and then keep hassling the customer for payment.

Hire a debt collection agency instead. A third-party professional will seek to get the money you are due. Collection agencies have the manpower and methods needed to ruthlessly pursue debts. This also keeps you from looking like the "bad guy" and can help protect your business’s reputation. While the agency chases your money, you can focus on running your business.

Joseph, Mann & Creed in Twinsburg, OH, provides aggressive debt collection services to businesses of all sizes. They have been serving companies across the United States since 2001. They are certified by the Commercial Law League of America, and their CEO is the president of the International Association of Commercial Collectors. Visit their website to learn more about their services, or call (216) 831-5626 to request a quote.