Maintaining Customer Relationships Creates a Tricky Proposition for Businesses Collecting Outstanding Debt
Companies face a delicate balance between preserving valuable customer ties and recovering money owed to their business
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Key takeaways
Companies face a delicate balance between preserving valuable customer ties and recovering money owed to their business
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Could the desire to maintain strong customer relationships hinder a business's need to collect outstanding debt? There are many factors businesses weigh when dealing with such delicate matters.
Breaking down the complex world of debt collection, an article from IC System reveals a critical yet challenging aspect of business finance. It emphasizes the vital role of debt collection in bolstering cash flow and profitability, while cautioning against risks such as damaged customer relationships, legal entanglements, and high costs. With clear policies, proactive communication, and ethical practices combined with careful management, the rewards of debt collection can significantly outweigh its potential pitfalls.
With clear policies, proactive communication, and ethical practices combined with careful management, the rewards of debt collection can significantly outweigh its potential pitfalls.
Still, are the fears of damaging customer relationships and facing legal challenges the primary reasons businesses hesitate to pursue outstanding debts?
Mfon Akpan, CGMA, Assistant Professor of Accounting at Methodist University, highlights the critical balance businesses must strike between financial recovery and customer goodwill. "There might be some ethical and legal concerns around collecting outstanding debt that the business may be concerned about having to mitigate," Akpan says.
There might be some ethical and legal concerns around collecting outstanding debt that the business may be concerned about having to mitigate.
— Mfon Akpan, Assistant Professor of Accounting at Methodist University
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About the author
As an Assistant Professor of Accounting at Methodist University, Mfon has over ten years of experience in teaching, research, and service in accounting and financial management. He holds a Doctor of Business Administration (DBA) degree from Indiana Wesleyan University and a Chartered Global Management Accountant (CGMA). This credential demonstrates his expertise and commitment to the highest standards of ethics and professional practice. His mission is to provide quality education and mentorship to students, to advance knowledge and practice in accounting and related disciplines, and to contribute to the community and the profession. He has developed and taught courses in accounting, finance, business, and management at undergraduate and graduate levels, using innovative pedagogical methods and online platforms. Mfon has also published and presented his researches on accounting topics in peer-reviewed journals and conferences and participated in various academic and professional committees and organizations. Additionally, he has leveraged his analytical, customer relationship, and new business development skills to serve as an Audit Committee Member for the City of Fayetteville, North Carolina.
