Managing your receivables is an important part of business, just like other assets. It should be calculated and recorded properly, and it can sometimes be a difficult task to manage internally. Outsourcing the recovery or selling your non-performing accounts can offer some smart and timely alternatives.
The process of selling your receivables can seem complicated, but it doesn't need to be. As industry leaders, we are here to work with you and debunk the misconceptions about debt selling.
Misconception #1: Debt-Selling ROI is so Low it Isn’t Worth the Effort
Selling your debt can be daunting. It can also be profitable. It is important to take the time to evaluate your debt and look for opportunities. Working with a debt buyer can help you identify if more can be gained from your aging debt. Often times you can improve your liquidity, create a stable and predictable cash flow or re-focus resources from operations to higher return areas. Debt selling might be the answer.
In summary, debt selling can help companies improve their liquidity, create a stable and predictable cash flow, and assist in allocating their best internal resources to higher return areas and projects. Check the article below to know if selling your non-performing accounts is right for you!
Misconception #2: It's Better to Recover these Assets In-House
Debt recovery is an expertise. Often firms will leverage existing teams to handle their collections. And this can work - up to a point. Leveraging experts to sell stale accounts and freeing your internal resources provides immediate liquidity that can be redeployed to generate higher returns.
Misconception #3: Debt Selling will Cause Brand / Compliance Issues
This is a common concern and an important consideration. Two things come to mind. First, do your homework when choosing your debt-selling partner and ensure they have the infrastructure and industry expertise to manage your debt. Second, when you sell your debt to a receivables management company, they can reduce collection compliance risks and are often better equipped to manage the day-to-day interaction with consumers. Canaccede ensures compliance within the dynamic regulatory framework and follows all provincial and federal regulations.
In a few words, when dealing with Canaccede, caring for your reputation is everyone’s priority.
Misconception #4: Retaining Ownership of Accounts will Maximize the Return
There is a level of expertise needed to work with aging debt. Leveraging receivables management firms that have processes and teams in place to manage these accounts can result in a better experience for your teams and yield a higher return.
Most debt-selling companies that have a collections team to deal with their accounts - performing and past due - see operational and fiscal improvements in their activities, mostly thanks to the immediate liquidity of older balances, which allows for re-investments in more profitable activities.
With uncertain financial times on the horizon, collections activities will become more difficult, and this might just be the year to start a debt-selling partnership.
Misconception #5: Companies have Bad Experiences with Debt-Buyers
Do your homework. Often when companies search for a debt buyer, they focus solely on price. And while this is important, you need to assess a few considerations. Proven experience, compliance track records and ample and ongoing funding are key points to differentiate a promising long-lasting partnership from a potential risk to your company.
Read the article below for the Top 5 Criteria to consider when searching for a debt-buying partner.
Are you a first seller or interested in knowing more about it? Contact our team of specialists to receive our Debt-Selling 101 Deck!