Ensuring liquidity despite coronavirus: Why outsourcing debt collection is worthwhile at this point in time.

So far, business has been very steady. The effect of the crisis on the payment practices of defaulting payers cannot yet be discerned. However, for the last quarter of 2020 and the beginning of 2021 a significant increase in the number of firms going bankrupt, and consequently, an associated rise in unemployment, can be expected. Already, in our discussions with clients we are noticing that the issue of liquidity has a completely different significance compared with before the crisis. This is why now is exactly the right point in time for companies to give more thought to professional receivables management.

First of all, a good debt collection service provider will be a member of the BDIU (Federation of German Debt Collection Companies), or equivalent professional association in other countries. But it should also treat defaulting payers fairly and respectfully, so that after the debt has been settled they can again avail of the creditor’s services. Another sign of a good debt collection company is that it is personally accessible to defaulting customers via their preferred communication channels and at their preferred times from morning till evening. The service provider should therefore be able to use all channels like email, SMS, personal visits or a chat function with debt collection specialists. This also includes offering the defaulting customers the option to use their preferred method of payment, for example PayPal or ApplePay. Moreover, a reputable debt collection company will only levy fees as permitted within the legal framework, because as a rule, the client (creditor) would like to be able to continue to do business with the consumers after the debts have been settled.