5 Ways Debt Collection Actually Helps the Economy

You’re running a business that provides a needed service to your community. Maybe you’re a doctor, a lawyer, an engineer, or even an architect. Regardless of the service that you provide, you will, at some point, need to collect on outstanding debt that is owed to you. It can be difficult to start the collections process. We all want to be paid, but it can be uncomfortable to think that we may be seen by the other party as a debt collector since debt collection gets such a negative reputation. Did you know that collecting on debts is actually good for our economy? It’s true. Here are 5 ways that debt collection actually helps the economy!

When you collect on debts that are owed to you, you’re helping the economy by helping your business. When your business is in good shape, you are able to continue to feed money back into the economy and into your own business.

Regardless of whether you decide to hire someone as an employee or outsource to a first party debt collector, you’re helping the economy by creating jobs. In July of 2015, the Bureau of Labor Statistics reported that unemployment for the nation was 5%. When you hire someone or outsource your collections, you are helping someone take care of their family.

You might find it hard to believe that debt collection can actually save money. When you collect on past due accounts, you help keep costs low. Think about this: how many times have you heard that the cost of medical services goes up for everyone because of people who cannot or just do not pay the bills they incurred from medical treatment? It’s true. In an effort to minimize the impact on the bottom line (which could affect how many nurses, doctors, and other professionals that a facility can afford to hire), healthcare facilities raise the prices in order to cover their expenses. When you are able to collect even a small amount of the money that you are owed, you are able to keep your prices more competitive.

So, you may be wondering how calling someone and sending letters about past due accounts teaches about responsibility and how that affects our economy. Most often when people don’t pay, it’s not necessarily an issue of not wanting to pay. It’s usually a matter of not having the money to pay. Debt collection reminds them of a debt they have and encourages them to make arrangements to pay that debt. Paying debts, even when money is short, is what we do as responsible people. If we can’t pay, we should contact the company that is owed and work something out. The money that is collected goes back into the business. It keeps costs down; as you can see, reason 4 is directly related to reason 3.