Decide well: outsource collections or implement software

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Collection agencies are organizations that manage the collection of another company's portfolio, thereby ensuring timely payments and a decrease in the rate of default. Although it is a good option to outsource those areas of the business that are not part of the core business, it is important to carefully evaluate whether this is the best solution.

Many times, hiring debt collection managers, or even just implementing debt collection management software, can be a more affordable alternative with a better return on investment when compared.

In this Moonflow – accounts receivable software post , we offer you a comparison that will help you decide whether collection and recovery companies or collection systems are the best option for managing your portfolio.

What will you find in this text?

The industries they serve

The collection stage

The cost of hiring

The control you want to have over your portfolio

The industries they serve
Collection companies in Peru sometimes do not address all economic sectors. A clear example is Equifax, which offers collection services for companies and only serves industries such as automotive, real estate, telecommunications, insurance and banking. In the case of collection programs , although some are restrictive, there are more diversified options. For example, Moonflow has developed an applicable and functional solution for different industries, including those served by Equifax.

The collection stage
In general, it is useful to implement collection software and manage the portfolio internally if it is a question of collections in the pre-default stage (preventive strategies) or if it is a question of prejudicial collection. On buy uae email database other hand, when a better management of the bad debt portfolio is desired, whose debt is of high figures and has been overdue for more than 90 days, the best thing may be to outsource this segment of the portfolio. Although always considering that the costs invested in collection companies are consistent with the money expected to be received from the debtors. After all, hiring such companies should be an investment, not an expense.

The cost of hiring
Another factor that differentiates both services: the implementation of collection software and the hiring of collection companies in Peru , is the cost of its acquisition or hiring.

Although it is an additional cost to the one handled in collections, the truth is that outsourcing can be more expensive than acquiring software. Collection companies can charge per service or commission for managed accounts; therefore, it is convenient to evaluate whether it is profitable to address all stages of collection or, in the best of cases, as we have explained before, only to deal with non-recoverable debts, since they require a judicial process and, therefore, greater specialization on the part of the managers.

In contrast to these companies, collection systems are a more affordable alternative. This is because their acquisition cost varies depending on the number of accounts in the portfolio and the functionalities required. Some of them, such as Moonflow, have alternatives even for less than $200 per month.