The problems of company debt and the iImportance of outsourcing payment services

Company commercial departments have always been under pressure to try and surpass the turnover of previous years, leading to greater risks and a significant increase in debts.

This policy of increasing sales turnover obliges companies to have a special department for managing credits and payments, analysing operations, with strict control of payments, trained personnel with an interest in debt management. This, however, is very expensive and difficult to manage which is why many companies look for a suitable service company to outsource this department.

When the prevention system used by the company fails to function, or the rate of debts puts not only financial feasibility in danger but also other types of internal company variables – such as responsabilising the commercial department with collection, thus reducing the department’s efficiency – it is necessary to consider as soon as possible the outsourcing of collection management.

The Debtor Tries to Utilise Creditors’ Weaknesses, such as:

Lack of coordination between departments
Emotional implications with client
Lack of suitable resources for follow-up and the passing of time

The company owed should set up a series of procedures in order to professionalize debt management, establishing certain stages and times for action. From the very start, the portfolio of debts must be segmented and certain objective criteria be followed in order to identify client types - an old client cannot be treated in the same way as a new client. The amount of debts, length of delay, internal risk level, number of accumulated debts, etc., must all be classified.

Clients reduce fixed structural costs and optimise human resources by contracting services and have professional, specialist management which will give them a higher rate of collection and the psychological advantage of not having to carry out an activity which causes stress to its employees.

The main advantages of our Organisation’s intervention on behalf of the client are, amongst others:

Outsourcing the collection services with the consequent savings as the client avoids the need for the structural services of a Debt Management Department and only pays the commission for debt repayments achieved and does not pay commission in advance.

The client professionalizes debt management in a very positive way (without threats, without coercion) as all collection functions are carried out directly by our own lawyers.

The control and administration process is simplified, all the information needed by the client being centralised through the legal offices of HGC/Madrid.