What can you do if your own, in-house efforts have failed to get your customer or client to pay their bill?
You really have only two choices — write off your uncollected A/R, or get professional help to collect some (or all?) of your outstanding revenue.
And when it comes to getting help with collections you also have two choices: using a debt collection attorney or hire a collections agency.
So which choice is right for you?
Using a debt collection lawyer
If you’ve searched Google for debt collections you probably found a number of lawyers who specialize in commercial debt collection.
So how do they differ from collection agencies?
For the most part their collection efforts will be no different from that of a collection agency.
However, if the debt you need to collect requires immediate legal action (as is sometimes the case) then you’re in good hands since they can handle this for you.
It is important to note, however, that hiring an attorney over using a collection agency will typically cost you more. Many collection attorneys charge an hourly fee, and some will also include a contingency fee based on how much they are able to collect for you. If the outstanding balance owed to you is quite large then the hourly fee payment option will probably not be much of an obstacle for you.
Additionally, attorneys usually charge a minimum fee and/or require the outstanding debt to be collected to be above a certain minimum amount.
At the end of the day if you’re unwilling to take your customers or clients to court over a past-due account then there’s probably no need to hire an attorney.
Hiring a commercial collection agency
The most obvious choice to collect an unpaid debt is hire a commercial collection agency.
Most commercial collection agencies do not charge any upfront fees, nor do they charge by the hour. The fee you’ll be required to pay is based on the amount of outstanding debt to be collected and a percentage of collected revenue based on how successful they are working on your behalf.
That means no out-of-pocket expenses on your part, and that you only pay when they collect.
Some specialize in working with certain industries (such as medical or dental collections), while others work with companies on a local, regional, or national level.
When it comes to hiring a collection agency make sure you ask about:
- their experience working with your industry
- their success rate (i.e. what percentage of revenue they can reasonably expect to collect)
- years of experience
- if they are licensed in your state and the state(s) of your customers or clients
- how much insurance their agency carries
The number one reason for hiring an outside agency rather than handling collections in-house is to avoid liability for failing to comply with all applicable collection laws.
And whether you choose a collection agency or attorney, do your due diligence and ask for a client list and any recent testimonials they can share with you to make sure you are hiring a firm with a track record of success.
Find a debt collection agency today
To find a debt collection agency that specializes in working with a business 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.