Incorporation Services Online

By David Montana

 CPA’s and accounting firms provide very significant and valuable services to all size organizations. Small business owners, as well as major companies and corporations, depend on their and expertise. This is particularly true during tax season.

As federal, state and local governments require businesses to maintain accurate and timely financial reports and statements, most organizations rely on accountants to organize these reports.

Though, while helping their business customers be more profitable, its very common for CPAs to experience cash flow issues of their own, with past due accounts from some of their delinquent business customers. This is particularly true during the very hectic and busy tax season.

Below are three key points to consider why accountants should turn over their unpaid receivables to a debt collection agency:

The Depreciating Value Of Money Over Time

As a CPA, you’re very aware that past due, uncollected money from services already rendered decline in value as more time passes. Not only do you allot valuable time, staffing and other resources to chase after past due accounts, but it also means this is time taken away from attracting new customers.

Turning over delinquent, non-paying receivables to debt collection agencies is a wise and inexpensive business decision. In addition to being in the recovery of delinquent accounts, debt collection agencies are better equipped with the professional staffing, resources, software and other equipment needed, and they can do this much cheaper than can be done in your company.

Generating income is your primary competency. Activities that take you away from those core functions, also take away the focus from generating revenue.

Increase Your Profit Margin Without Acquiring New Customers

As previously stated, you know how costly it is to draw new customers. Its common knowledge that spending for advertising and marketing is necessary for businesses to acquire new customers. Though, many businesses tend to see advertising as the only means to gain new customers and grow already narrow profit margins.

Often overlooked is the tremendous value lying dormant in your uncollected past due debt. It should also be mentioned that when taking in account your past due debt, youd have to almost double your new business volume just to break even.

Turning delinquent receivables over to a debt collection agency is far less expensive, and yields predictable, positive results. Monies recouped here will produce greater net profit to your accounting firm. Money spent on marketing/advertising, while ignoring your past due receivables, is not spending smart money.

Adding Value For Your Business Client

Businesses are always seeking ways to trim costs and save capital.. As their CPA, you can show additional ways to save, advance cash flow and improve your customers’ financial bottom line.

Teaching them the importance of turning over delinquent receivables quickly when internal collection efforts prove unsuccessful, you make them see the cost savings in lost opportunity dollars, the depreciation of unpaid debt over time, not to mention the savings from reduced internal staffing and resources.

This is even truer, if you are also seeing an improvement in your own business efficiency and increase in your own cash flow.Showing your business customers how to further save money and increase their business bottom line will put you in even better standing with them. It also makes you stand out from others in a very competitive market who similar accounting services.

David P. Montana has published widely and worked as a business advisor in debt collection agency services three decades. David provides additional beneficial tips and resources about debt collection procedures for accountants.

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