Does the word “collections” make you cringe?
Sad to say that for most people out there, including your staff, the PERCEPTION of what a collection agency does can often seem distasteful… to say the least.
And that’s just unfortunate, because the reality is far different.
Despite what you may have heard, most collection agencies (the professional ones) don’t simply call and harass your former customers or clients until they pay up!
Rather, they help businesses like yours recover lost revenue after goods and services have been provided to clients and customers. In fact, collection agencies helped business recover nearly $54.9 billion in total debt in 2010.
So what about your business?
When should you contact a debt collection agency?
Many collection agencies recommend that you begin to contact them between 45 and 60 days for your past due accounts.
As for medical practices and dental offices the time frame may be a bit longer, since insurance company payments (and disputes) may be involved.
You can always ask the collection agency you’re speaking with what time frame they recommend for your type of business. The general rule of thumb is the sooner you can get them involved in the process, the more likely you are to collect… and you’ll collect a greater percentage of what’s owed to you.
Any reputable agency should be able to provide you with their “success rate” based on their ability to collect on your behalf, along with the best time for their getting involved in your billing/collection process. Meaning, your chances for collecting outstanding revenue diminish the longer you wait to get them involved.
Once a debt collection company gets involved it can take an average of 90 days from the start date for you to recover some or all of the money.
Yet another reason not to wait too long.
Finally, you’ll need to realize that collecting what is rightfully yours is a PROCESS, not a one time event.
Meaning it can take some time for the agency you choose to collect payments on your behalf. Even after getting professional help, it may be required to track down some of your former customers or clients. This involves skip tracing, and is a service that many debt collectors provide to businesses like yours.
Once your customer has been contacted they have 30 days to respond to the collection agency contacting them on your behalf. Finally, successful collections may take months as payment plans are worked out, etc.
The bottom line?
It’s better to collect something than nothing — and collecting what you’re owed can take time even after you get help.
The key is to have some patience with the process, since there are laws in place that must be adhered to, either by you attempting to collect on your own behalf (which is why it makes sense to get professional help), or by the agency you hire.
Finally, here are some questions to ask a professional collection agency you’re thinking of hiring:
- What is their track record for your industry/business type?
- How many years of experience do they have?
- Are they licensed for the state(s) where your customers are located?
- Are they bonded/insured?
- Do they offer skip tracing (included in quote)?
- Are they members in good standing with the ACA?
- Do they offer you monthly reports/updates?
It does pay to hire a professional when it comes to collecting outstanding invoices. But only if you take action before it’s too late…
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 collections agency that can help you recover what’s rightfully yours.
Either way it’s your money… you decide.