Knowing how to collect from a customer is not an easy task. However, it is important to do so, since the company needs to receive payments to continue operating. In this sense, collections must be done correctly to avoid conflicts and to successfully reduce defaults.
According to Serasa, Brazil has 65.2 million Brazilians in default , in February 2022. Of these debts, 28.6% are credit card debts and 12.5% refer to expenses in retail trade.
There are several reasons for defaulting on debts in the country, which can be influenced by high interest rates, reduced average income and rising prices, for example. Understanding the customer’s reality and being empathetic is one of the essential factors for amicable collection.
In this content, learn about the impacts of default on the financial health of your business and learn techniques on how to collect from a customer in a respectful manner. Also find out how you can automate collections for greater efficiency and time optimization. Keep reading to learn more!
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What are the impacts of default on business?
Every business is subject to with defaults . If it is not receiving payment, the company may vietnam whatsapp number data to take out a loan, which increases costs, especially if the expected payments to cover the loan are not received.
In the worst-case scenario, high default rates can lead a business to bankruptcy, so it is essential to have stable control over finances. Understanding the consequences of this reality helps to better manage the company’s finances.
For example, if you have an average default rate, it becomes easier to predict the need for credit to move cash flow. Therefore, making the decision to make an advance on receivables instead of a loan is a more viable option for the business.
Importance of debt collection management for the company
Predictability is an essential aspect of how to write an audience profile defaults . To achieve this, effective collections management is necessary. Customers often simply forget to make a payment, and sending a collection message can prevent this from happening.
In other words, there is no point in only charging when they are late; it is important to establish a healthy relationship with the customer and ensure that they have the necessary options to make the payment as they wish.
What are the differences between judicial and extrajudicial collection?
Extrajudicial collection is out business to consumer database the parties involve. In this case, the company and the client. Judicial collection is out when collection attempts have been unsuccessful and it becomes necessary to collect from the client judicially.
As it is time-consuming and expensive, judicial intervention should only upon when necessary. To avoid reaching this point, it is important to build good collections management and establish strategies to collect from defaulting customers.