Collecting Debt Will Soon Be Much Harder. Is Your Business Ready?
There’s a wave heading your way, and it’s going to be massive.
I’m not talking about the next wave of Covid-19, but it is something related. The conversations I have been having recently with business leaders bear an eerily similar undertone.
Without disclosing too much, the burden of overdue accounts has now become too much for even the broadest shoulders to bear. Big business has been holding the fort for many months now, but it clearly can’t go on much longer.
You see, rather than collect overdue accounts, these large corporations have been doing what they can to support their struggling customers. Rather than cut people off for nonpayment, chase the money owed — and eventually court the very same customers to sign up again when things improve, there has been a fairly concerted effort to offer everything reasonable to help.
Strategic initiatives have been focused on supportive retention, offering scaled-down options with lower fees, and ways to defer or stretch out payments.
Here’s the thing: those millions of customers still owe the money — more and more of it. The numbers are staggering. In nearly every case, it has now become too much. Those floodgates are registering a level of strain never seen before.
What does this mean to you?
It depends on your situation.
If you’re a small or medium business executive or risk manager looking at a rising number of overdue accounts or defaults, it’s time to take action on them.
You think it’s hard collecting now?
Wait until the big guys collectively unbolt those mighty gates, unleashing a tidal wave with a breadth and intensity of repercussions unlike anything recent generations have ever witnessed. (I’m not trying to be dramatic. This is simply what reality looks like.)
When that happens, how can your business expect to recoup the money you’ve been unable to collect in these days of unprecedented grace and support? Not only will your efforts pale in comparison, but the domino effect of new bankruptcies and consumer proposals will be astonishing.
As the pandemic draws on, most businesses and consumers negatively affected continue to struggle. The majority of restaurants, airlines, retailers, theatres, and gyms have been barely hanging on for months, and it’s truly remarkable how many have made it this far.
Have I been wrong up until now? Sadly, no. The startling casualties keep adding up. Generational brands like Reitmans, Aldo, DavidsTea, Cirque du Soleil, Hertz, MEC, FlightHub and now Le Chateau, to name just a few recent high-profile bankruptcy filings— and the list of businesses teetering on the edge is so much longer. How are the companies who owe you money faring?
And what can you do? As I’ve been beating the drum of proactiveness for a while now, I have seen a lot of smart businesses take heed — and be glad.
I can tell you this: taking decisive action is very seldom regrettable in the long run.
While it’s easily done (just fill out this form), that’s not to say it’s an easy step for everyone to take — particularly the first time. But clients always tell me that assigning past-due accounts to their collection agency partner brings immediate relief.
The most common regret I hear of? Not having done it sooner.
This is a time, more than any other, when collecting debt is work best left to the professionals.
Please stay healthy, stand up for your business, and never hesitate to reach out with any questions.
President and CEO of MetCredit,
Canada’s top-performing consumer and commercial collection agency.