It goes without saying that accounts receivables is the cornerstone of every successful business.
After all, getting paid by customers or clients on-time helps you maintain steady cash-flow.
And as you know, cash-flow is key.
Unfortunately, today many businesses face fiscal challenges caused by an accumulation of past-due accounts as customers fall behind on payments. Regardless of signed contracts and extending terms, some companies are unable or unwilling to pay for products or services that were received from you.
If this “hits too close to home” what can you do about it?
Reasons for choosing a commercial debt collection company
Larger businesses have the “luxury” of handling their collection efforts in-house, with large A/R departments whose sole function is to call on past-due accounts in order to collect payment.
Their success depends on the level of training and expertise of their staff. What’s more, adding more staff (even if well-trained) increases your bottom-line costs, which affects your overall profitability.
And smaller companies can’t even think of hiring staff to handle this in-house.
As a result many small businesses simply assign this task to an office manager or bookkeeper to make collection calls on their behalf. This translates to lost productivity, not to mention less than stellar results.
It is more cost effective to simply outsource this business function to a professional commercial collection agency.
How commercial debt collection is cost effective
A commercial debt collection agency can help your business in a number of way.
For starters, professional agencies utilize staff that are specifically trained for collecting unpaid bills on your behalf. In other words, they know the collection laws that apply to your state and the state(s) where your current and former customers reside.
That alone is reason enough for hiring an outside agency, i.e. mitigation or elimination of liability for failure to comply with applicable collection laws.
What’s more, they have tools at their disposal to track down customers who have “fallen off the radar” — i.e. skip tracing.
And they’re able to do this for you for a fraction of the cost.
Typically, this means that if they fail to collect on your behalf you don’t have to pay them for their services. In my book that translates to a win-win for you and the collection agency you decide to hire.
As you can well imagine know-how and training only get you so far.
At the end of the day someone has to actually contact your delinquent customers and get them to pay some, or all, of what you’re owed.
That’s where experience comes into play.
Whether letters are used in conjunction with calls, using a professional collection agency with years in the business can help you collect more than you typically can on your own. That’s because they know what to say, and how to say it, without being rude or disrespectful.
This protects your reputation.
It can also help you to keep a good working relationship between you and your former (or current) customer or client, leaving the possibility open for more projects or engagement down the road. And since it generally costs more money to attract a new client rather than keeping an old one, reputation management is not something to be overlooked.
Now, when hiring an outside agency you can get a feel for how their experience can work for you by asking:
- how many years of experience
- if they work with companies in your specialty/niche
- what their success rate is for collecting
- what percentage of outstanding revenue they typically recover
Finally, the agency you use will negotiate on your behalf in their collection efforts.
After all, collecting a portion of what’s owed is better than nothing.
This will help your bottom line because the longer unpaid bills remain outstanding, the less chance you have of collecting even a fraction of what you’re owed. Rather than writing off the debt, an outside agency can often collect payments on bills you had little chance of recovering through your own efforts.
When you factor all of these considerations together, you can see that using a collection agency is often the most efficient way to recover outstanding payments.
Find a debt collection agency today
To find a collections agency that specializes in helping business likes yours, simply request a free services quote from qualified and reputable companies.
Click the link and compare free collection agency quotes today.
This way you can save time, money and aggravation by hiring a professional who can help you collect some (or all?) of your outstanding accounts receivable.
After all, when you get down to it you really have two choices:
- you can keep doing what you’re doing (and hope for a different result), or
- you can find a commercial collection agency that can help you recover what’s rightfully yours.
Either way it’s your money… you decide.