The importance of credit recovery for companies

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When a customer has their name registered with the SCPC , they can negotiate their debt with the store owner. This way, their name is cleared and they can make new purchases. However, credit recovery also offers advantages for companies. They receive the amount owed and return to operating with a stable cash flow.



Brazilian scenario
Before we understand the importance of credit recovery, we need to understand the context of our country. In 2017, ANBIMA conducted a survey to learn about the savings and investment habits of our people. According to the study, 40% of Brazilians do not save any money, that is, they use their entire salary to pay their bills.



Good financial education is a distant lawyer database for many people. At the same time, they are encouraged to consume. The result? Accumulated debts and a bad reputation.



But what can companies do about this?



Adopting credit policies and developing more effective sales strategies is a good way to go. See how to avoid defaulting customers .



What is credit recovery?
Credit recovery is a collection process . It is carried out by specialized companies that help defaulters to settle their debts . Once the situation is regularized, the companies receive the unpaid amounts and the customer can make new purchases.



Maybe you know this story:



Pedro is passionate about technology and every year he buys a new, state-of-the-art cell phone. When the iPhone XR was released, he ran to his favorite store and paid for it in 10 installments. Everything was going well until he lost his job. Pedro started to fall behind on his payments and, unfortunately, he was unable to pay the last one. 30 days later, the case was registered with SCPC (Central Credit Protection Service) and, as a result, his name was “blacklisted”. Now, he can no longer buy from the store where he bought the device or from any other.



What can Pedro do?



Contact the store owner to discuss your query.



No matter the segment, product or service, stories like this happen every day in different institutions.



Why is credit recovery important for companies?
If recovering the amount owed isn't good enough, here are some other advantages of credit recovery for companies:



1. Rebalanced cash flow
For a company to be sustainable, its profits must be greater than its expenses, i.e., its cash flow must be positive. Defaulting on payments makes this control difficult. In more serious cases, the company needs to reallocate resources from investments or reserves to cover the shortfall. Adopting a credit recovery strategy is, therefore, a way to rebalance cash flow .



2. Working capital does not become a loss
When you sell in installments and receive the full amount of the product after a few months, you have working capital. This is not a loss because the money invested will be returned in the future. However, when this does not happen (as in the case of default), it is impossible to avoid losses.

For this reason, credit recovery is an interesting measure: even if the payment takes time, it will happen and will help to restore the missing assets.