Worldwide Customers: Should You Fear Them Or Favour Them?
Sustaining growth in a dog-eat-dog marketplace is becoming increasingly difficult. At times, it can seem as if there is a glass ceiling for domestic trade that is impossible to break through. Expanding into emerging international markets is an excellent way to maintain an edge in an increasingly competitive business environment.Successful international expansion may require the help of an experienced advisor who can help mitigate risks. Risks may include potential debt recovery issues. Below is a look at the financial risks of serving worldwide customers and the strategies that a company can take to address them with confidence.
The Unique Challenges to International Trade
Many businesses struggle in their efforts to expand internationally because they are not prepared for the unique challenges that accompany international trade. While cultural disparities and time zone differences can complicate international trade, the following three barriers all relate to payment and are critical due to their ability to impact cash flow:
- Lost time and resources spent on failed internal attempts to collect debts
- A lack of understanding of how different cultures approach debt
- The absence of a local presence to pressure delinquent customers
Successfully addressing these challenges requires a strategic plan, an understanding of your customer base, and a sustained focus on debt management.
Four Steps to Successful International Debt Collection
Ideally, your business can secure all international payments quickly and easily. However, this is not the case for many businesses that enter into international trade. The best approach to international debt collection involves a combination of research, planning, and outsourced expertise. Below are four key steps to international debt collection:
- Understand how attitudes toward payment and debt vary according to culture and country
- Research international companies before agreeing to extend payment terms
- Include a jurisdiction clause in your payment terms and contracts
- Enlist the support of a trusted international debt collection company
This final step is the most critical element of a plan to tackle debt collection. If your company is struggling to secure payments from international customers, your choice of professional international debt collector can be the difference between your business having sufficient cash flow to operate and your company forcing to abandon growth overseas.
Key Qualities to Seek in an International Debt Collector
Not all international debt collectors are created equal. In an industry where the stakes are high, you must choose an efficient, experienced provider who understands the countries and cultures that you serve. Below is a checklist of key qualities that you should seek as you evaluate international debt collectors:
- Scope. Proven experience securing payment from clients in 100+ countries
- Efficiency. Seek a provider with a history of collecting debts swiftly.
- Cultural competency. Choose a company with a strong working knowledge of other cultures.
- Experience. Providers with at least a decade of experience are often best.
- References. A robust collection of references from clients across the globe
- Legal expertise. Select a debt collector with an awareness of international dispute resolution.
- Guarantee. Consider companies that have a no collection, no fee policy
Choosing the Best International Debt Recovery Partner
Clearly, expansion into international trade can help businesses achieve continued growth. However, successful international business expansion hinges upon your ability to collect payment from customers located in remote regions of the world. Failure to receive timely payments can cause a business to close its doors. You can prevent this from happening by seeking the services of an experienced international debt collector.