Are Consumers Buying Again And Will This Lead To Increased Sales And Thus Increased Collections?

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The economy has slowly been getting better and with the better news from Wall Street regarding unemployment and consumer confidence, it makes sense to say that people are buying again.  The good news for businesses is that the increased number of purchases means more capital coming in, but it usually means that collections efforts will have to increase as well.

People Being A Bit More Careful

Though the purchases are starting to increase they are nowhere near the levels they were before the 2008 collapse.  That is not all good news as a lot of them feel that they need to exercise more care because their salaries have gone down.  In other words a lot of them may face the same problems making the payments that they had in the past, but now they will do so because they have less money to spend.  Do not think of the extra care people are taking as proof that collection efforts will not be needed as much.

Sales And Collections

There is a correlation between the increase in sales and the increase of collection efforts.  That is because the math cannot be denied.  The more sales that you have the bigger the chance that some will default in their payments; it is simply a matter of averages.  That does not mean that you do not want more sales, it only means that a percentage of those additional sales will eventually default, not that every additional customer will. 

Business Owners Should Be Ready

If there is a project that is expected to increase the amount of sales or accounts that your company will see then it is a good idea to be ready for some collections to take place.  You will notice that defaults can start taking place after the first payment for the account all the way until the end of the contract or payment plan.  The collections strategies will be different depending on the account and the amount of default so be ready for all of them.