When it comes to running your business probably the single biggest frustration is waiting for outstanding payments to arrive.
Hearing “the check’s in the mail” hardly satisfies when you have payroll and other financial obligations to meet. And at the end of the day time IS money, after all.
So when it comes to contacting a commercial collection agency there are two common questions most business owners have:
- when should I contact an outside company for help?
- which agency is right for my business?
When it comes to the first question a good rule of thumb is… the sooner, the better. This typically means (for most businesses) that once a payment becomes 90 past due with no contact from your customer, client, or patient it’s probably time to get professional help.
An answer to the 2nd question is more involved and requires a brief discussion regarding…
Five keys for successful commercial collections
When it comes to choosing the right collection agency, here are five (5) points to consider:
- average recovery rate
- fee structure
- success rate
When it comes to average recovery rate this will let you know how successful a commercial collection agency will be a recovering your debt.
In others words, how much can they reasonably be expected to collect on your behalf. Their success rate will depend, in large part, to HOW they contact the folks who owe you money, WHAT they say when contacting past-due accounts, and their EXPERIENCE working with a business such as yours.
Some agencies are specialized to handle medical or dental collections while others focus on the needs of small business.
You should ask if they have worked with businesses like yours in the past, along with any industry specific data regarding collections (i.e. recovery rate) as well as any case studies that may be relevant to your situation as well.
Next, you’ll want to ask about their fee structure.
More and more commercial collection agencies will not charge you an upfront fee to get started. And that’s a good thing. In fact, most companies base their fees on a percentage of the revenue they are able to collect. So that means you don’t have to come out of pocket to get the collections process started.
Just be sure to ask questions about how they will be paid before you sign an agreement.
Finally, any collection agency that has been around for a while should be able to provide you with references from other companies that they have worked with in the past. Again, the key consideration is to make sure that the types of companies they generally work with – and have successfully collected debt for – is related to your industry or field.
Success in collecting one type of debt when dealing with one type of customer may not necessarily be translated over into other industries (or other types of customers).
One last consideration is to make sure that the company is licensed or registered to do business in your state.
Collections laws do vary from state to state, and you’ll want to make sure that their collection efforts are in compliance with state laws. After all, the number one reason for hiring an outside agency to handle this aspect of your business is to make sure that you’re protected from any potential lawsuits that might arise from attempting to collect a debt on your own.
After all, the goal is to finally collect payment for your business in as efficient and painless a manner as possible.
Does that make sense to you?
Find a debt collection agency today
To find a collections agency that specializes in helping businesses like 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.