Right up there with filing tax returns and firing staff, chasing overdue accounts is a time sapping pain in the backside you’d rather not deal with.
Being so infuriating, it’s tempting to hold-off recovery of your overdue accounts. But the hassle of chasing bad debtors pales in comparison next to the seven hidden ways your overdue accounts are killing your business.
7 Crippling Costs Of Overdue Accounts
Crippling Cost #1: Cost Of Communications
The first cost of chasing overdue accounts is the actual expense of communicating with your debtors. The paper. The printing. The stamps. The phone calls. Like drips from a leaky tap… each drop appears small and insignificant but left unchecked they drain your profits insidiously.
Crippling Cost #2: Employee Wages
On average businesses spend 9.5 hours every week managing their unpaid accounts. Even paying a staff member a measly wage of $12 per hour, that ads up to $5,928 ever year! Now I’m sure you’d agree that six grand would be better off in your pocket than spent chasing bad debtors.
Crippling Cost #3: Lost Opportunity
Even greater than employee wages is the opportunity lost by employees chasing debtors rather than drumming up business. Imagine the impact on your bottom line if a staff member instead invested nine and a half hours a week following up customers on the phone; cross-selling them other products or services; stimulating referrals. By tying up your employees time chasing accounts you’re flushing tens if not hundreds of thousands of dollars down the drain.
Crippling Cost #4: Lost Productivity
Similarly, every minute you spend personally dealing with overdue accounts is a minute you’re not producing. What’s critical to understand is you’re the principal money earner and you’re time is too valuable to waste even a second chasing overdue accounts. By wasting hours of your invaluable time chasing debts, not only is your hourly rate significantly higher than that of your employees, you’re also taking time away from your highest money-generating activities. While the ultimate cost of this to your business is incalculable what you can be certain of is that it’s huge!
Crippling Cost #5: Emotional Toll
With the exception of some pretty rare individuals, virtually everyone hates chasing debtors with a passion. Not least because of all the b.s. and abuse that you’re subjected to when dealing with these people. At the risk of sounding a bit airy fairy all that negative energy, all that anger and frustration… a fair whack of it gets transferred to your accounts manger, darkening their mood and in turn infecting your entire staff.
Now before you raise your eyebrow, I’d like you to imagine you’re being verbally abused right now. If you’re like most people you can’t help but feel somewhat angry and violated. And you’ll harbor those emotions for days. Festering in this state your performance, your decision making and your relationships (both at work and at home) will all suffer. So if that’s how one abusive incident can impact your life, what’s it doing to the person who deals with abuse day-in, day-out as a regular part of their job? Again, this is a cost that’s practically impossible to quantify but don’t kid yourself… it’s devouring your profits each and every day!
Crippling Cost #6: Stifled Growth
As you know, the life blood of every business is cashflow. Without it your business will struggle to survive let alone thrive. But with your revenues tied-up in unpaid accounts, your debtors are effectively strangling your cash-flows and in turn suffocating the growth of your business. Again, this is a cost that’s practically impossible to gauge but understand… having your money frozen in unpaid accounts is ruinous for both your wealth as well as your ultimate financial security!
Crippling Cost #7: Un-Recovered Accounts
The seventh hidden cost of overdue accounts is the actual income lost from uncollected debts. You see, most business owners hang-on to their unpaid accounts way too long. And if there’s one debt recovery law that’s set in stone it’s the longer an account remains unpaid, the less money you’ll ever see again. So by ineffectively chasing debts for months and sometimes even years you’re needlessly kissing away money you’ve worked so hard to generate. And while it might sound crazy, it’s a mathematical fact that failing to recover a $1,000 debt is the same as missing out on $12,500 of new business! That’s the true hidden cost of an unrecovered account.
The Quick And Easy Solution
Thankfully each of these seven clouds is lined with gold. You see, each and every cost described above shares one and only one root cause. And when you quickly and easily rid yourself of this solitary cause your profits can’t help but soar.
So what is the sole source of all this loss?
Your lack of an efficient and effective highly systemized process to recover accounts. Now if you lack such a system… there’s no shame in it. You’re in the same boat as 99% of businesses and frankly it’s not your fault. After all, who’s ever shown you how recover your accounts properly? Certainly not any Debt Collection Agency!
However, by having an affordable, simple Debt Recovery System (which includes powerful Debt Collection Letters) working for you in your business you’ll instantly eliminate the headaches and hidden costs holding you back for good.