Three Keys for Successful Commercial Debt Recovery

When it comes to running your business there is really only one rule to follow — be profitable.

Yes, that much is fairly obvious.

Now, when it comes to collecting on past due accounts there are only three options available to you:

1. Write off your lost revenue
2. Use your existing staff (or outside bookkeeper) to re-invoice or make calls on your behalf
3. Hire a collection agency

So which option makes the most sense for your business?

Commercial Debt Recovery Simplified…

Clearly the first option isn’t much help to your bottom line. Though you’d be surprised to find out just how many businesses end up “choosing” this method by default.

Of the three, the second option is probably the most common one.

Yet, it often proves to be much less successful than simply hiring a profession agency to handle this for you.

Why is that?

There are a couple of reasons.

First of all, you (or your staff) simply aren’t trained or experienced enough when it comes to collecting outstanding bills.

What’s more, relying on your employees to handle this for you often fails to achieve results for a number of reasons: most people don’t like making collection calls, and at times employees sympathize with the customers you’re trying to collect from.

Finally, without a detailed knowledge of collection laws in your state the last thing you need is a call from your customer’s attorney letting you know that they’re taking action against you for violation of the laws.

That’s why it makes good business sense to hire professional.

So what should you look for when it’s time to hire a collection agency?

1. Licensed
2. Experienced
3. No up front fees

For starters, make sure they’re licensed to do business in your state. Though many companies are set up the national collection agency, some only do business in a certain state where states.

Next up you want to ask about their experience in working with industries or businesses like yours.

Some questions to ask are:

1. the track record for working with industries like yours
2. their average success rate in collecting on past due accounts
3. testimonials and case studies that you can check out

Finally, you should check on their rate structure. It doesn’t make sense to pay for any upfront costs or fees at all. In fact, most collection agencies work on contingency – meaning they only get paid when you get paid.

In my book that’s the definition of a win-win.

Does that make sense?