Why Outsourcing Debt Recovery Makes Sense for SMEs
Managing debt recovery is a crucial aspect of maintaining cash flow and ensuring financial stability, especially for small and medium-sized enterprises, or ‘SMEs’ for short. While some businesses choose to handle this in-house, there are compelling reasons to consider outsourcing this task to a professional service like Axis Tradepay.
Advantages of Outsourcing Debt Recovery
1. Expertise and Experience
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- Professional services bring specialised knowledge and experience to the table. Their teams are well-versed in the latest regulations and best practices, which ensures compliance and efficiency. For instance, Axis employs trained professionals who can navigate complex legal frameworks and are well experienced in handling difficult debtors effectively.
- Businesses can also preserve relationships with their customers by outsourcing debt recovery to a third party as more often than not, the person processing orders and dealing with feedback is tasked with the duty of collecting debt.
2. Cost-Effectiveness
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- Outsourcing can often be more cost-effective than maintaining an in-house team. SMEs can avoid the expenses associated with hiring, training, and retaining specialised staff. For example, a company might find that the fees paid to a debt recovery service are significantly lower than the cumulative costs of managing an internal department, or even an individual staff member.
3. Time and Resource Management
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- Recovering debts in-house can be time-consuming and distract from core business activities such as processing orders. Outsourcing allows SMEs to focus on their primary operations while experts handle the debt recovery process. Businesses could use the time saved by outsourcing to concentrate on product development and customer acquisition, for example.
4. Higher Recovery Rates
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- Professional services typically achieve higher recovery rates due to their expertise and persistence. Axis has a proven track record of recovering debts effectively – this is partly because they employ a variety of strategies and have the leverage to negotiate payment plans or settlements.
But how does debt recovery differ for in-house teams?
In-House Debt Recovery VS. Professional Services
| Aspect | In-House Debt Recovery | Professional Service |
| Expertise | Limited, variable | High, consistent |
| Cost | Higher overall | Lower, as it avoids staffing and training expenses |
| Time and Resources | Consumes internal resources | Frees up time for core activities |
| Recovery Rates | Variable, often lower | Higher, more reliable |
| Legal Compliance | Risk of non-compliance | Ensured compliance |
Choosing Axis for your debt recovery needs is a strategic decision that can transform your financial health.
With late payment charges of 15% and interest added to and collected with the debt, you benefit from our services with no fees to pay. For part payments or when late payment charges are not collected, a commission of just 6% applies under our ‘no collect, no fee’ agreement. This ensures that you only incur costs on successful recoveries, guaranteeing a risk-free engagement.
Our expert team is dedicated to recovering your debts efficiently, allowing you to focus on your core business activities. Don’t let unpaid invoices disrupt your growth—partner with Axis today and experience the peace of mind that comes with a professional service.
Contact us now to learn more about our services and how we can support your business.
