5 Debt Collection Acronyms You Must Know About

Most people believe they are familiar with common abbreviations and terminology. But then again, every sector has its own set of jargon and acronyms. And the debt collection sector is no exception. You're bound to hear some unfamiliar phrases whether you work with your accounts receivable department or a Debt Collection Company. But you should never feel ashamed to ask someone to define words you don’t understand.

In this blog, we have highlighted the five most popular debt-collecting acronyms you should be aware of.

5 Most Common Debt Collection Acronyms You Must Know

1. CEI

The Collection Effectiveness Index. Organizations use this measurement to assess the success of their collection operations. Many believe the CEI is more accurate than the DSO (see below). CEI is calculated as the sum of initial receivables and monthly credit sales less ending total receivables. After that, divide that amount by the total of the opening receivables and the monthly credit sales less the current closing receivables. For a percentage, multiply the result by 100. The closer your percentage is to 100%, the more effective your efforts will be.

2. DSO

The Days Sales Outstanding. DSO is known as the average number of days it takes for a business to collect income after a sale. It can be computed monthly, quarterly, or annually. A simple formula divides the amount of accounts receivable for a particular period by the total value of credit sales over the same period. And then multiply the outcome by the number of days in the period measured.

3. EOM

The End of the Month. This is a typical invoice phrase. It is critical to define whether payment is due at a given point in the month or after a set number of days. However, it's common to use a MOM (Middle of the Month) payment date as a perk for a discount.

4. NSF

Non-Sufficient Fund. It indicates insufficient funds in the bank account of the check writer. It is essential to understand why a check "bounces." NSF is not the only reason for check bounce. We also encountered the reasons like "account closed" and "account could not be located." And understanding the true issue at hand while trying to collect payment is crucial for developing a workable solution.

5. ROI

Return on Investment. It is a common business word that is highly pertinent in debt collection. Normally, ROI is determined by deducting the initial investment from the final value. However, when it comes to collections, it's crucial to take into account how many staff hours you are spending attempting to collect on an overdue payment.

Conclusion

We hope that the information in this blog will help you better comprehend collection jargon while dealing with collection agencies. And If you are seeking a qualified debt collection agency, Debt Nirvana is the best option. We have extensive knowledge and great expertise in 3rd party debt collection. At Debt Nirvana, you will receive the best debt-collecting service in India. To leverage our services or learn more about us, please get in touch with us at rvm@debtnirvana.com.

How to avail a Business Loan with Bad Credit Score

 It's no brainer that a good credit score is quite crucial to apply for any loan. A great credit signifies your current financial situation. It can be a make-or-break parameter that helps the panel make their decision. With a bad credit score, it becomes quite difficult to even get the credit card. Which is why maintaining a good credit score is extremely essential to run a business. There are many professional companies that cater credit report services india to help you boost your credit score.

But there are many entrepreneurs who have bad credit scores and still want to apply for business loans. 

So, in this article, we will help you with 4 things to consider in getting a Business loan with a below average credit score.

1. Research the credit score requirements for business loans.

2. Create a business plan with clarity.

3. Start taking measures to boost your credit score.

4. Pay your bills on time.

1. Research the credit score requirements for business loans.

It is important to conduct a proper research of what is required to avail for business loans. It makes you determine that lenders that cater loans for business, specially with bad credit score.

If your credit score is below 500 then it can become challenging to find lenders who can help you. So, sit with your team and do a thorough research of lenders who can help you.

2. Create a business plan with clarity.

While you apply for business loans, it is quite helpful to make a business plan in an organized way. And further you can share that business loan with the lender. With an organized business plan, the lenders can easily get convinced to work with you. And in that business plan you can include details like, your business's monthly sales, how you use your funds, and you can also mention how the loan can benefit your business.

3. Start taking measures to boost your credit score.

If you seriously want to get a business loan, it is important to keep trying to enhance your credit score. You must also examine the credit report to understand your score & then decide if there are any differences. And it is also important to keep in mind that you will the credit score is not something that can be achieved overnight.

4. Pay your bills on time.

Paying off your bills on time can effortlessly help you enhance your credit score. So make sure you pay all your bills on or before the due date. Late paying of bills also contributes to keeping your credit score low. Ensure that this step becomes your priority before moving forward. You can set your own monthly calendar for a reminder, or stick a sticker on your desk, and you can also sign up to many financial apps that are floating the market. Those apps can keep reminding you of your due date.

Conclusion:

We hope this blog helps you understand the importance of credit scores. And even if you have a bad credit score, you can still be qualified to avail of a business loan. Do not get demotivated, it is all a phase and you can too sail through it!

If you are looking to improve your credit score Debt Nirvana can surely help you through it. We are a team of skilful professionals. We also cater to the best debt collection service india. For the best assistance, visit our website and know more about our best services.

Benefits of Account Receivables Outsourcing

 

Introduction

Account Receivables(AR) are popularly known as debtors. Debtors mean, clients or credit customers who haven't paid their dues to the business organization.

Setting up a separate AR department required a hefty investment, time, and effort. And there are many matters in business that require more attention than Account Receivable. So, business organizations should consider outsourcing their AR process, instead of doing it themselves. 

Account Receivable outsourcing service providers are equipped with the skills, technology, and tools. They can significantly handle your AR workflow. This way, you can focus on more essential matters of business like marketing, product development, and research. 

The most significant benefits of outsourcing Account Receivables

1. Simplifies your billing & payment process

Outsourcing account receivables will allow quick access to reliable automated billing & payment services. It will free up your employees' time, and you can utilize it on more important tasks. Outsourcing will significantly streamline various AR processes. It also optimizes AR operations and boosts overall efficiency. 

2. Significantly reduces administrative overheads & costs

Outsourcing account receivables will significantly cut down your administrative & operational costs. It enables you to invest money in improving the company's other core functions. And this improvement will strengthen the business operations & customers relations.

3. Speeds up the debt collection process

As per studies, account receivables unpaid for 90 days and more may generate only 75% of the total outstanding amount. Your business will recover a lesser amount if you delay collecting overdue accounts. It will significantly hinder your company's cash flow management. 

Professional account receivable service providers are equipped with skills and the latest technologies. They can speed up the debt collection process so that you can close your books of account sooner and save on cost.

4. Enable you to focus on critical business matters

Businesses need to maintain their growth rate to remain in the highly-competitive market. To achieve desired growth, a business organization must focus on marketing, product development, pricing, customer services, and R&D. 

While managing account receivable activities are tedious and time-consuming. It distracts your staff's focus from essential business matters. Outsourcing account receivables to the debt collection agency will provide you with more time. So, you can pay more attention to crucial business matters.

5. Caters high efficiency with fewer AR errors

The debt collection agencies have efficient and skilled staff for debt collection. They have the latest technologies and know the best practices for debt collection. Their accuracy and persistence deter errors in account receivables.

The AR service provider can efficiently complete your account receivable tasks with fewer errors. 

Conclusion

Managing account receivables is a very tiresome process and requires utmost attention. So, handling AR processes with other business activities significantly strain the business organization.

Outsourcing account receivables to professionals will save time and money. It also provides you with desired results in a given timeline. So, if you require any competent AR service provider, then Debt Nirvana will prove to be an excellent choice for you. We have experienced and qualified staff to provide the best debt collection service india. Kindly visit our website to know more about our services.

Ways To Boost Your Credit Score

 

Introduction

A loan is the most significant way to overcome financial needs and emergencies.  However, to obtain a loan, one should need to fulfill the eligibility criteria laid by the banks. A good credit score is one of the essential criteria for getting credit from banks or other financial institutions. A credit score is a three-digit number that indicates the creditworthiness of a person.

The calculation of a credit score is done by using the credit history of a person. A person’s credit history contains information like his payment history, number of credit cards and loans used by him, etc. A credit score ranges from 300-900 points, and a score of more than 750 is ideal for obtaining a loan.  A high score can increase your chance, while a low score can decrease your chance of getting a loan. As we are a provider of debt collection service india, here is our take on how you can boost your credit score.

5 ways to boost your credit score

1.  Pay your outstanding bills on time

Your due payment of outstanding bills can significantly impact your credit scores. Credit history with the late payment of bills & EMIs can seriously endanger your credit score. If you want to maintain a good credit score, then do try to repay your bills and EMIs on time. It will be more beneficial if you make a habit of paying the full bill instead of the minimum due amount to keep the outstanding amount low.

2.  Customize your credit limit

Another important aspect that greatly impacts your credit score is your credit utilization ratio. Banks or any other financial institutions decide certain credit limits for you. If you over-utilize the credit limit available to you beyond a specific limit will adversely impact your credit scores. However, if you can restrict your credit usage below a particular limit, then it will significantly improve your credit score. You can manage this situation more efficiently by customizing your credit limit according to your past expenses.   

3.  Check your credit report to avoid mistakes

The essential thing you must do to improve your credit score is to make regular checks on your credit report. It will effectively help you to detect errors in your credit report and gives you a chance to get them rectified. Thus, the calculation of your credit score is based on the credit report. It means you must ensure that your credit report is free from mistakes.   

4.  Never try to remove your old accounts from the report

People have this misconception that removing old accounts or accounts with negative history from credit reports will increase their scores. Negative remarks are bad for the credit score, but they will be automatically removed from your report after some time. If you try to remove your old accounts, it may harm your credit score. The reason is along with negative remarks, there might be a good repayment history connected with those accounts. It can effectively improve your credit score.

5.  Consolidate your debt

This technique can prove to be beneficial if too many debts burden you. In this technique, you will obtain a debt consolidation loan from your bank and pay off your other debts. Due to this strategy, you only have to make one payment. Besides, one single debt will considerably decrease the interest rate so that you can pay off the loan faster. It will fairly improve your credit report and increase your credit score.

Conclusion

We hope the tips mentioned above will help you serve your purpose. Your credit score holds so much importance whenever you want to take credit from banks or other credit unions. Regular bills payment, proper credit utilization, and management can increase your score. However, irregular bills payment and financial mismanagement can cause you a bad credit score. It ultimately prevents you from getting any financial aid from banks or other financial institutions. Nevertheless, you don’t have to worry about your credit score, we have a team of experts who can look after all your credit report & AR outsourcing needs. Contact Debt Nirvana at www.debtnirvana.com to know more about our services.

4 reasons that stops you from hiring a debt collection agency

 

Introduction

Business is not just buying, manufacturing, or selling. It is a collective form of many different activities. As an owner, you know that doing a business is not an easy task. There are so many errands to run for the smooth functioning of the business. Collecting the debt is indeed not a task you are looking forward to. Debt collection is a task that can drain your time, money, and eventually your patience.

Although, It doesn't mean we should avoid this task or wait for the debtors to pay their debt. Unpaid debt can adversely affect your company's cash flow. In the long run, it can even hamper your firm's financial positioning.

However, you can avoid this situation by hiring an agency for the debt collection service India. In this blog, we have mentioned the most common reasons that stop businesses from hiring a debt collection agency.

The 4 most common reasons that stop businesses from appointing a debt collection agency

1) I don't have much debt

People believe that collection agencies only deal with a larger amount of debt. Perhaps you think the debt collection agencies won't be interested in taking on your firm's debt because it isn't a significant amount. 

However, think this way if the debt amount can negatively impact your cash flow or your firm's financial health, then it is not too small to ignore. So, instead of spending your time and resources chasing debtors, you can outsource this task to a professional collection agency. 

2) Services of a debt collection agency are too expensive

Many business owners have this misbelief that the services of debt collection agencies are too expensive. Hiring a debt collection agency is not an expense but an investment. Many reputed debt collection agencies do not charge hidden fees and operate on a commission-only basis.

It means they will take the pre-decided percentage of the amount from the recovered debt. The "No collection, no commission" policy of debt collection agencies ensures that they will persistently try to recover most of your debt. So, ultimately the cost of hiring a debt collection agency won't be that high for you. 

3) Dealing with the debt collection agency is time-consuming

Some people might feel that hiring a debt collection agency involves a long handover process. However, it's not true. Professional debt collection agencies have years of experience in the debt collection field.

So unlike you, they can immediately act upon the situation and start chasing your debtors. So, hiring a debt collection agency will not waste your time. Instead, it will save you time and increase your productivity. So, don't think much and hire an AR Outsourcing service provider for a faster and smoother debt recovery process.

4) The debt collection agency will spoil my relations with clients

Another common misconception is that debt collection agencies harass debtors to recover money from them. This belief makes you worried that if you hire a debt collection agency, then they might do the same with your clients. The aggressive nature of the debt collection agency might scare your clients and spoil your years-old relations with them. 

However, this concern is not entirely wrong. You can overcome it by hiring a competent debt collection agency that can maintain its decorum at any stage of debt recovery. The agency will recover your debt from your clients without hampering your relations with them.

Conclusion

Chasing debtors while handling business operations is a tough nut to crack. Besides, it can waste your valuable time, money and stagnate your productivity. While hiring an Account Receivable outsourcing agency for debt collection can benefit you in many ways. It will save you time, resources and maintain a healthy cash flow in your business. So, if you are interested in collaborating with a debt collection agency, hiring Debt Nirvana would be a wise decision. We are one of the most reputed and competent debt collection agencies with experienced staff. Contact us for more information or to get a quote.

Is personal credit rating used to approve small business loans?

You might be puzzled by how creditors want to know your credit rating if your small business seeks a loan. It's only natural that they'd look into your company's finances, business model, and company credit rating. This indicates how eligible your company has been since you registered for an Employment authorisation or got a credit card account.

But why should corporate creditors worry regarding your own credit record if your corporate and personal credit are independent figures?

Your personal credit rating is, in many ways, one of the essential aspects that a lender would consider when reviewing your business loan. Let's look into this:

What is a personal credit rating?

As you may know, your personal credit rating indicates how eligible you have been for most of your personal finance. Creditors record your history to credit agencies. So you'll have a decent credit rating if you make your payments promptly, won't exceed your current credit lines, and prevent bad records. For many of us, a personal credit rating is the initial and most essential measurement of our creditworthiness.

Why are personal credit ratings important to business lending institutions?

A reputable business creditor grants you a loan only if you are sure to repay the debt. They will discover if there's any data out there that contradicts their beliefs. On the other hand, creditworthiness is a helpful criterion for lenders to assess for various purposes.

Many small business owners, particularly single proprietors and residence entrepreneurs, struggle to produce a credit record for their company. They support their firm with their own financial institution or have taken out personal loans previously.

Another option is that your company is so recent that you have not yet had the opportunity to establish a thorough business record. Startup company loans might be tough to come by at reasonable rates, but if you have an established financial status if that record is based on your personal credit—they become more accessible.

Lastly, despite your own credit rating, your company's credit rating does not follow you around for the rest of your life as it belongs to the company. If you started a company and sold it to somebody else, your rating will be transferred to a new proprietor. As a result, your own credit rating genuinely reflects your creditworthiness throughout your life.

What impact does your personal credit have on your business loan?

For instance, if you are a prudent business person and your company is doing well then you are eligible for large statistics and long-term achievement. Also if you have a long term business then it fits most of the criteria for an exclusive commercial loan, except your personal credit rating.

How this might affect your prospects with a company lender or if you're seeking an unsecured loan? Despite how great your company financial statements look, you'll be rejected if your personal credit rating falls under 650. 

Because their rules are less severe and consider an array of aspects, you might be able to get a loan from a digital creditor. However, if approved, the terms will be far less favourable to your firm.

If you want to create or know about Credit Reports India and want assistance, you can get our debt collection service india. We provide one of the best debt collection services and credit report services india. Feel free to get in touch with our experts at +91-9810010294 or visit our website.

Detailed information about credit report

The majority of people have multiple credit reports. Credit reporting organisations are also known as credit bureaus. They obtain and maintain financial information about you which is acquired from lenders, credit card issuers, and other financial institutions. It is not mandatory for creditors to report to all the collection agencies.

Creditors utilise these reports to determine whether or not they will give you money and, if so, at what interest rates. Your credit report is also used by lenders to see if you are meeting the requirements of an active credit account. Other companies might need your credit reports to decide whether or not to sell you a policy, rent you a residence, or supply you with cable television, broadband, utilities, or telephone service. 

Why is your credit report important?

Your credit report and credit score are verifiable factors of your financial trustworthiness. They can be very influential in a variety of situations. You might view your credit report as a trustworthy companion or a threatening specter. It depends on the present state of your credit accounts and the record of your bills and loan payments.

Your credit report may assist you to get authorized for a credit account with amazing bonuses. If lenders consider you financially secure they might also build your career or a new house. 

However, if you have a poor credit history, the credit or loan application process can be frightening. Knowing what's on your credit report and how it affects your credit score might help you prepare for what's ahead.

How Credit Reports Can Assist You in Achieving Your Financial Goals?

Your credit record will always be there to attest to your dependability when you're looking for a job, home, or a new automobile on interest. Credit reports are utilised for a range of other critical purposes. Here are a few uses for Credit Reports India:

1. Seeking work opportunities.:

Your credit report might be used by hiring managers. They might assess your trustworthiness and make judgments on the basis of your reports. 

2. Car insurance:

A credit report may be used by insurance firms to estimate your premiums. Depending on your report they might approve your insurance and rates. 

3. Getting a property to rent:

A good credit history would indicate that you are more likely to pay your rent on time. This would also offer you a stronger potential landlord.

4. Utilities such as television, the web, and mobile phones are available:

Many cables, broadband, and mobile phone companies may check your credit report to see whether you need to pay a deposit before beginning service. So a good credit report would assist you in easy approval. 

What Data Does Your Credit Report Include?

1. Credit Account details:

Previous and present financial accounts, financial information, credit score, and the period of time each account has been open are all included in credit bank details.

2. debt collections:

It may occur If a creditor has ever sent delinquent account obligations to an authorized debt collection agency. 

3. Personal details:

Any identity you have used in affiliation with an institution, your exact date of birth, identification number, are all details included.

4. Recent Investigation:

Any institutions that have lately queried regarding your credit, such as credit card firms or lenders, are listed under this.

We are one of the top agencies and we provide the best debt collection services. For any further queries, connect our experts at +91-9810010294 or visit our website.

What Are Debt Recovery Regulations and How Do They Work?

 

Debt recovery is the act of persuading people or businesses to pay

money they owe to other people or businesses when they fail to

repay the debt at the agreed-upon period. When money is not

recovered it becomes a bad debt to the company. 

Bad debt collection refers to the entire process of recovering default payments and previous debts that have been deemed unpayable by the creditor.

Here we have a detailed explanation to assist you in better understanding debt collection laws and rights:

When can you expect a debt collector to approach you?

Debt collectors are permitted by law to approach you at any time. Lawfully, this differs from state to state. If you work during particular hours and don't take efforts to prevent debt collectors from calling, they may call your employer. They can also call at this period if you want them to.

Debt collectors have the legal right to contact you through email, fax, phone, normal mail, or text messages. Keep a log of each contact if a collector approaches you outside of these ways or at an odd hour, especially when it happens frequently. Debt collectors also can't contact you many times a day. 

Is it conceivable for you to be contacted by a debt collector at jobs?

Debt collectors have always had the legal authority to contact you at your place of employment. However, if you prefer that they don't, you can instruct them not to and they must comply.

If your employer answers the phone when a debt collector calls, the debt collector is not authorised to call your workplace unless your supervisor grants them permission. Sending a written letter instructing them not to contact you is the only way to convince them to stop contacting you. Alternatively, have your manager warn them not to phone you at work.

A debt collector can only contact you after this stage to notify you that your creditor is suing you or pursuing other legal action against you.

What is the maximum amount that debt collectors may demand?

A debt collector is not allowed to ask for more money than you owe. When the debt collector sends you a written debt validation notice, it must indicate the exact amount you owe, according to the collector. A debt collector has no legal authority to claim that you owe additional money.

If you feel the amount you're being asked to pay isn't right, submit a letter to the debt collection firm within 30 days informing them of your suspicions. The debt must subsequently be verified in writing by the agency. They won't be able to contact you again until that happens.

You have 30 days to challenge the debt. But the debt collector has the right to continue contacting you because you missed the 30-day deadline.

The debt collector must quit calling you while your claim is examined if you reject the debt because you don't believe you owe any money or the number is wrong. Prior to resuming collection calls, debt collectors must verify every debt you reject in writing. Collection actions, including calls, emails, and other forms of communication, can resume after a debt collector delivers you documentation of the debt.

The Effects of Debt Collections on Your Credit

Even if you pay the bill, it's a good idea to check how it's hurting your credit if you have a debt in collections. credit report services India are simple and direct.

You can see how your credit is affected when you pay off your bills. Each of the five elements that make up your scores—payment history, debt consumption, diversity of accounts, age of credit accounts, and credit inquiries—are included in your score and report card.

Our Business Information Reports are one of the most trusted sources of business data and our company is developing an AR Outsourcing strategy. For more contact us at +91-9810010294 or visit our website.

The impact of Tax Season on Debt Collection

 

Debt Collection during Tax season is similar to the holiday season in terms of debt collection. According to the National Retail Federation, 35.5 percent of shoppers getting a tax refund this year plan to use it to pay off debt. As a result, many in the industry consider mid-February until May to be the most productive season of the year for debt collection.

We were keen to see how tax season might affect our business against standard collecting methods. Collections growth in the first half of February followed a similar pattern to prior months. We noticed a substantial increase in customer involvement and debt payments as the first wave of tax refunds arrived in consumer bank accounts in the second to last week of the month. We anticipate that tax returns more than doubled our month-over-month collections rise in February after accounting for a seasonal adjustment.

Composition of Payments and Commitments Has Changed

When comparing one time payments and payment plans, payment plans as a percent of revenues have increased over the years. And we continue offering more flexible payment choices to customers. 

As tax season approached, we noticed a 2x spike in one time transaction as a percentage of total revenues.

By focusing on payment arrangements, we can emphasize the impact of tax refunds even more. As more people are able to afford shorter-term plans, the average installment amount per plan has increased. This is a pattern we've noticed across our client base, with varying degrees of influence depending on the client.

Can a collection agency sue the Internal revenue service  for my tax refund?

The federal government will only withhold or pay your tax refund to one of your creditors if you have four forms of debt.  State income taxes, child support payments and money owed to other federal agencies, such as unpaid federal student loans, are all examples of these debt collection services.

As a result, debt collection services in India are hired by other creditors to collect money from you and are unable to stop your tax refund.

If you can't pay your monthly credit card payment and the firm sends your account to a collection agency then You must be conscious.  Yet, that depends on the region and these 3rd party debt collections may have alternative options for collecting payment from you. 

Collection companies are given permission by state laws to set off your salary or seize your bank accounts.

A collection agency may be able to seize your tax refund once it has been placed into your bank account. If you request that your tax refund be placed into your bank account and if the collection agency is able to levy that account, the levy applies to all your available cash, including your tax refund.

Our Business Information Reports is one of the most trusted sources of business data, we can help you analyze the profitability of the company, economic stability, and payment efficiency. For any assistance, you can contact us on  +91-9810010294