'Write off and move on’ does not hold true when you look at its full impact
Making extra collection endeavours might seem less enticing, yet both the workload and resources required are commonly found to be below what it takes to compensate for the writing off of the same balances.
Although write-offs cannot be avoided entirely, all means should be exhausted before any past due trade receivables are judged as uncollectible. From ageing analysis to persistently tracking each unpaid invoice, your team can make sure that no due receivables can slip through.
If the debtors keep being unresponsive to your collection attempts, it may be time to seek support from a third party. There are some advantages they can supplement your team with. The most important gain is your time and resources.
Once an external collection specialist takes over the problem accounts, you can channel your team’s attention into the new and current receivables. Next to that, your chance of collections improves significantly. Major collection agencies often bring years of experience and specialised approaches to the table.
Combined with your knowledge of the debtors, collection approaches from an external party carry much more weight in many cases; because the debtors interpret a third party’s involvement as your escalation of the matter.
Another benefit is that your financial reporting is enhanced. Good collection agencies always document their collection efforts and interactions with the debtors. The information does not only enrich your reports, but also helps maintain reporting standards across all local operating subsidiaries..
Last but not least, your compliance is guaranteed. International collection agencies like Atradius Collections have an extended network of local law firms that ensure every collection activity complies with the regulations of the country where it is performed.
Compared to writing off, making extra collection endeavours to recover past due trade receivables might seem less enticing. Yet, both the workload and resources required for this are commonly found to be below what it takes to compensate for the writing off of the same balance
At the same time, by taking measures to mitigate writing off and save it as the last resort only, you have also minimised its risks and saved both the top and bottom line of your business.