How does a debt recovery company operate?

What is adebt recovery companygood for, how does it operate to reach its objectives? That’s a question that any person eager to recover an unpaid debt might well ask. In order that you might properly understand how the recovery of your debt is organized by a debt recovery company, we submit for consideration a case analysis by TCM Belgium.

What is the purpose of debt recovery?

We are all aware that a VSE(very small enterprise) might be wiped off the map byoutstanding invoices. In fact, the same goes for big businesses. It is a question of proportion of outstanding invoices in relation to the aggregate amount of sales. If we want to see enterprises grow keep delivering goods and services at reasonable prices, it is vital that they haveefficient managementof their unpaid receivables.

These enterprises, big or small, may handle this internally. Ditto their accounts, data processing maintenance, office cleaning, payroll administration and numerous other functions besides. However, specialization allows more adapted organization and brings economies of scale.

The debt recovery company focuses on the collection of the receivables of its client, the creditor.

The steps of recovery by TCM

• We receive yourassignment order. We enter it in our system, confirm acceptance and send a letter to the debtor. In fact, there is no point asking someone for payment if he does not have access to a document with the details. Aletteris still the best way to kick-start a recovery.
• We then follow aprocedure. The procedure, however, is only a suggestion, because it is the experience and creativity of the manager that count for taking the best course of action according to the situation. We call, write letters, send e-mails, SMS, wevisit your debtor. The object of the exercise is to collect the payment or, as the case may be, to understand why payment is not possible.
• We keep you informed throughout. You can also consult each fileon lineat any time.

The basic principles

For successful debt recovery all it takes is men and women with common sense who can count on structured information.

• Personalities

There may be 1001 possible reasons for an unpaid invoice, but there are two key qualities for obtaining a payment:– ListeningIf you do notlisten you will never understand the cause of non-payment. – PolitenessIf you do not remain approachable there is little chance of any solution that will satisfy all concerned and, even if an agreement is somehow reached, of hoping, once you hang up, that the person on the other end will in fact make the agreed payment. It is with these essential criteria and these essentialvaluesin mind that we recruit our staff.

At TCM these persons in contact with your client, the debtor, come from the same country as the debtor. (We are present in more than100 countries)

• An organization

To listen sympathetically you must rid your mind of material considerations. A well-designedinformatics systemhelps. The person managing your file must have ready access to all the relevant information and must be able to send it on, adapting to the needs of his or her addressee.

The basis of this informatics system is a diary that allows the personalized tracking of each debt. That same system must offer functions for communication with you, our client; for the management of debtor payments and for allocating them correctly; for systematically remitting these payments to you, our clients.

This system must also be protected(access denied unlesscorrect authorizations; no risk of loss of information).

The result

If the debtor is solvent but it seems impossible to find an amicable solution, we propose that the creditor seek legal redress. In fact,less than 1% of debts assigned to TCM are finally referred for settlement to a court. That means over 99% of debts find a reasonable solution in an open and positive dialogue.

The creditors are satisfied, particularly since the debtors usually are too, having cleared their debt without any unpleasantness. True, some debtors may experience difficulties in paying their debts, but it is nonetheless a natural and acceptable practice. All that is done mainly on the basis of a success fee.

This avoids excessive or unexpected costs.

Conclusion

The debt recovery company is an important actor in the economy, allowing creditors to place on the market quality goods and services at contained prices while continuing to invest in partners and associates and in other developments. The collector’s service is relatively low-cost and highly respectful of all parties involved.

At TCM we areproudto help our clients and proud of the way we do business. Do not hesitate tocontactus for any information.