Companies can now sell their services all over the world with a click, but it appears to be challenging to collect payments on time from their customers. The result is a rise in international debt. Even though debt collection procedures vary from country to country, businesses often overlook the complexities involved.
Various strategies are required to successfully collect an international debt. Every day, the world gets a little more complicated, and it gets a little harder for people to manage their debts. It is best to contact an international debt collection agency in this case.
In this piece, I’ll walk you through the most pressing problems in international debt collection and offer suggestions for addressing them.
What are the biggest international debt collection Problems?
Uk Debt collection is challenging in general, but it becomes exponentially more so when trying to collect from customers located in other countries.
Measuring and comparing debt collection performance across countries is a significant challenge in the field of international debt collection. When it comes to debt collection, we have clients in more than five different countries.
It’s hard to tell if a company’s debt collection operations are profitable or loss-making because debt collection methods, willingness to pay rates, supported payment options, salary ranges, and regulations vary by country.
Phone payments account for 40 percent of all outstanding debt in Hungary and Poland but are much less common elsewhere in Europe. Debt collectors in some countries send debtors text messages (SMS) about their outstanding balances, while in others such messages are not legally binding.
Debt recovery process rules are regulated at the national level, making it crucial for businesses to be aware of country-specific regulations when pursuing international debt collection.
Because they simply move debt from one bank to another, credit card transactions are generally forbidden around the world. Credit card debt settlement is legal in some jurisdictions (although it is not recommended).
Even if a company has no choice but to sue a debtor, it may face significant hurdles depending on the country’s regulations because courts in different countries operate differently.
Courts in Australia will not take action on debts older than six years. Hungary’s limit is either five, three, or one year depending on the nature of the debt.
To reduce the aforementioned complications, most companies centralize their international debt collection operations. Conveniently, they can handle debt collection for five countries from a single office.
Debt collection agents fluent in the debtors’ language who can also understand and use financial and legal jargon are invaluable in such circumstances. If the languages in question are rare, then finding and hiring such a workforce is another major challenge for international debt collection companies.
Lastly, different time zones will complicate your processes if your company has debtors on multiple continents. It can be a nightmare to negotiate with a customer on the other side of the world or across time zones.
This means that to collect debts from customers all over the world, your company will require debt collection agents with flexible schedules, how to hire a debt collection agency.
Effective Strategies in International Debt Collection
I could go on naming issues, but instead, let’s focus on some top practices that can boost your international collections.
Here are my best recommendations for turning your debt collection nightmare into a lucrative enterprise:
- Agents with the necessary linguistic proficiency are hard to find, as was mentioned earlier. Debt collection agents don’t exactly have it easy either.
Companies across the globe are experiencing labor shortages, so you’ll need to get creative to find the most qualified candidates for debt collector positions. Even positions as debt collectors can be made more attractive with the right human resources strategies.
Having your debt collection headquarters in an area with plenty of available jobs is a smart move.
If you move your debt collection operations to, say, a Mediterranean country and pay the employees’ relocation expenses, you may be able to hire talented foreign workers who can streamline your operations.
- If you’re having trouble getting your team to work together due to time zone differences, try recruiting members of Generation Z.
- Technology can also be useful in this respect. In addition to tracking domestic and international KPIs, setting time zones in your IVR technology can facilitate international debt collection.
- Finally, in debt collection, it is important to strike a balance between the amount of time invested in collecting debt and the amount that can be collected. You are well aware that debt collection results in rising expenses.