If you’re like most people chasing unpaid accounts is a time wasting pain in the neck you’d rather not deal with. It ranks up their with filing tax returns and firing staff.

Being so demoralizing, it’s tempting to delay recovery of your overdue accounts. But the hassle of chasing bad debt is a mere scratch when compared to the seven hidden ways your overdue accounts are cripple your business.

7 Crippling Costs Of Overdue Accounts

Crippling Cost #1: Cost Of Communications

The first expense of pursuing unpaid accounts is the actual cost of communicating with your debtors. The paper. The printing. The stamps. The phone calls. While individually small, these hard costs collectively burn thousands off your bottom line.

Crippling Cost #2: Employee Wages

Every week your business will spend around 9.5 hours dealing with overdue accounts. And even if you pay someone a modest $12 hourly wage , that ads up to $5,928 ever year! Granted, that may not sound so much but wouldn’t you rather have an extra six grand in your pocket than waste it chasing debtors?

Crippling Cost #3: Wasted Opportunity

Even more costly than employee wages is the opportunity lost by employees chasing debtors rather than drumming up business. Imagine the impact on your profits if a staff member instead invested nine and a half hours a week following up customers on the phone; cross-selling them other products or services; stimulating referrals. By tying up your employees time recovering accounts you’re flushing tens if not hundreds of thousands of dollars down the drain.

Crippling Cost #4: Diminished Personal Effectiveness

Similarly, every second you spend dealing with overdue accounts personally is a second you’re not producing. Now as the business owner your time is worth substantially more than a tiny $12 per hour. So by wasting hours of your precious time chasing debts, not only is your hourly rate significantly higher than that of your employees, you’re also taking time away from your highest money-producing tasks.

Bottom Line: Even though this cost is virtually incalculable… understand that it’s massive!

Crippling Cost #5: Emotional Cost

With the exception of some pretty rare individuals, virtually everyone abhors chasing people for money. Not least because of all the lies and abuse that you’re subjected to when dealing with these people. At the risk of sounding a bit airy fairy all that negative energy, all that anger and frustration… most of it gets transferred to your accounts manger, darkening their mood and in turn infecting your entire staff.

Now before you raise an eyebrow, take a second and imagine you’re being verbally abused right now. If you’re like most people you can’t help but feel angry and violated. And you’ll stew on those emotions for days, impairing your performance, your decision making and your relationships — both at work and at home.

So if that’s how just one abusive incident can impact your life, what’s it doing to the person who deals with abuse on a daily basis as a routine part of their job? Again, while this cost is practically impossible to quantify understand that it’s costing you in more ways than purely financial loss.

Crippling Cost #6: Stifled Growth

As with every other business, the life blood of your business is cash-flow. Without it your business will quickly suffer cardiac arrest. But with your cash-flow tied-up in unpaid accounts, your debtors are effectively strangling your cash-flows and in turn suffocating your growth.

Again, this is a cost that’s practically impossible to gauge but understand… having your money frozen in unpaid accounts is ravaging your wealth and ultimately your financial security!

Crippling Cost #7: Un-Recovered Accounts

The last hidden cost of unpaid accounts is the actual income lost from failing to recover your debts. Unfortunately, most businesses hang-on to their overdue accounts way too long. And if there’s one irrefutable truth when it comes to debt recovery it’s the longer an account remains unpaid, the less money you’ll ever see again.

So by ineffectively chasing debts for months and sometimes even years money you work so hard to generate is being needlessly burnt. And while it might sound crazy, it’s a mathematical fact that failing to recover a $1,000 debt is the same as missing out on $12,500 of new business! That’s the true hidden cost of an un-recovered account.

The Quick And Easy Answer

Now before you get in your car and look for a bridge to jump off there’s actually a silver lining here. The good news in all of this is there’s one and only one root cause to all this loss taking place in your business. And that one cause can be quickly and easily eliminated in a single step.

So what is the sole source of all this loss?

Your lack of an efficient and effective highly systematized process to recover debts. Now if you don’t have such a system… don’t beat yourself up about it. You’re in the same boat as 99% of businesses and frankly it’s not your fault. Chances are no one’s ever shown you how recover your accounts properly! Certainly not any Debt Collection Agency!

However, by having an affordable, simple Debt Recovery System working for you in your business you’ll automatically eradicate every hidden cost holding you back once and for all.