Anyone who is active in business knows how important cash flows are. Theoretically, one is always torn between yield and liquidity. More concretely, this means that if you are no longer liquid, you have a problem and have to file for insolvency. Now you can simply increase your reserves and not invest so much. You then always have a nest egg on the high side. But now the profitability decreases. What is not invested cannot yield a return and thus in the end also reduces the company's profit.
This shows how much a company depends on payments that come from outside. One problem is invoices from customers that are not paid. Especially in times of crisis, this can lead to a domino effect.
A company is doing well. But its customers can't or won't pay the bills. It gets into difficulties itself and files for insolvency. As a result, invoices that the company itself has with suppliers cannot be paid again, and so on.
One way to recover at least part of the outstanding amounts from customers is to hire a debt collection service. Depending on the scope of services, this may include the preparation of invoices and much more. The core of a debt collection service, however, is the collection of payments. However, one should not imagine it in the way it is suggested in many a gangster film: A group of sinister guys with baseball bats breaks the legs of the debtor to lend weight to the demands. No, no, debt collection agencies are bound by legal requirements and are also listed in a corresponding register. They often even try to negotiate partial payments with the debtor when the chances of receiving the full amount are slim. Above all, the formalities, such as adherence to deadlines, the correct wording of reminders and much more are the challenges of a professional debt collection service.
If you are looking for a debt collection agency, then you should choose one from the immediate vicinity of your company's country location. So if you are located in Hanover, then a debt collection service Hanover is the right choice. Advice is necessary. Because a debt collection service costs money. Here, as a business owner, you should weigh up whether collecting the debt is worth the expense. Equally, the strategy could be to send a reminder for unpaid invoices once and then ignore them. This is especially worthwhile if the majority of the invoices are paid and the unpaid ones are negligible in the balance sheet. However, a collection service is also worthwhile if you want to avoid building up your own staff for dunning and invoicing. A good collection service can therefore be seen as an outsourced service provider that complements your business.