There’s an old saying that goes something like this — “you can pay now… or pay later.”
Well, when it comes to collecting on outstanding revenue this certainly applies. For example, when it comes to handling your collection efforts in-house how effective is your staff at doing this for you?
Do they like making collection calls?
And more importantly, are they any good at collecting most, if not all, of your unpaid invoices?
Why it pays to hire a professional collection agency
Time is money… that much is obvious.
And when it comes to diverting your critical staff people to send 2nd or 3rd notice invoices over and over again, and then make follow up phone calls, the truth of the matter is that your staff are not focused on the tasks for which they were hired.
In fact, here’s an email a good friend recently shared about his experience collecting unpaid invoices:
“If we factor in the time spent chasing money, sending and archiving reports and back and forth with follow up invoices, we really lose money on this…”
What’s more, the longer you wait contacting an outside agency to help with your collection efforts the less effectively they’ll be when it comes to recovering lost revenue.
This is what we mean by the cost of waiting.
In other words, once accounts are 120 day (or more) past due your chances for collecting even a portion of what you’re owed will begin to diminish.
So how long is too long?
That’s a good question, and one you should ask a collection agency before you decide to hire them to help you. In fact, any professional agency worth hiring should be able to share with your their track record of success with respect to collecting outstanding revenue. And in some cases they will have statistics based on the different niches or industries they have direct experience working with.
What’s more, their staff are professionals whose experience and training are ultimately working for you.
Collection agency fees simplified
So what will all this professional help cost your business?
Well, that depends.
Some companies may charge you a flat fee based on how many accounts you have outstanding, while others work on contingency, meaning you only pay them a percentage based on how much they are able to collect.
Contingency fees make sense because this provides and incentive for the collection agency to collect as much as possible, and the fees you will ultimately pay for their services are based on how successful they are working on your behalf.
Either way there is one final reason to hire a collection agency, and that involves liability.
There are many state and federal collection laws that business must comply with when it comes to contacting customer or patients who owe you money. And failure to comply with all the laws may land you on the wrong side of a lawsuit. By hiring a collection agency they will assume liability for complying with the law.
The key?
Make sure they are bonded and licensed to do business in your state as well as the state(s) where you customers, clients or patients reside.
After all, being prepared for the “unexpected” will help you to save time, money and improve cash flow in the long run.
Get help with outstanding accounts receivables 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 only 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.