I just finished reading an excellent article from, of all places, an Australian paper.
Before I get to the crux of how that’s relevant, I have to comment that the article has the headline (as mine does)
The one thing you should do to slash your bad debts
|Roger Mendelson (Australia) “SME let debts slide for too long”
And then goes on with a list of about 20 really good things that will increase your small business cash flow…. so The One Thing.. there is no one thing.
A basic truth of the article however is that the economy, ours and the world’s is finally improving.
Through the tough times small and medium sized businesses have been in a fight for their survival, pinching pennies.. holding on to bad debt as long as possible in the hope that it will help.
Now that the economy is coming back on track, its time to re-evaluate your credit and debt strategy.
For starters, why are you spending your resources trying to collect on old debt, when those resources can be better leveraged growing your business in a new economy? Two years ago, when it was about survival, not growth, that was an appropriate mindset. It’s time to reevaluate though.. A dollar worth of effort to grow the business might have returned 75 cents two years ago, but a dollar worth of effort might have brought in 1.10 in cash flow by collecting on old bad debt. Before this made sense.
In a growing economy though, those number turn upside down. Your investment in growth returns are higher than your investment in collections are.
Its time to take a hard look at that old debt. The older it gets, the harder it is to collect. Hand it over to a collection agency, write it off, and start re-investing in the growing economy.
YOU MADE IT through the worst recession since the great on in the 1930’s! I’ll wager many of your competitors didn’t! Pat yourself on your back, congratulate yourself, and get out there investing in your business growth. Leave the old bad debts to us.
Debt Collection Agency for Small and Medium Sized businesses.