Collecting outstanding can be a challenge, especially if you try to handle this on your own.
Each industry or niche has it’s own set of unique problems, and that is especially true for commercial property management companies who lost revenue because contracts were broken. Taking action is a positive step in the right direction.
Successful collections comes down to working with a specialist who is familiar with your situation and has expertise in helping businesses like yours collect.
Commercial debt collection specifics
For example, outstanding debts need to be collected from a range of client types, such as:
- Property owners who have been foreclosed
- Property owners who have had legal action taken against them
- Tenants who were evicted
- Tenants who broke their contracts
- Nonprofits who lost their funding
And working with each type of debtor requires specific strategies in order to recapture lost revenue.
How much can you recover?
All things being equal, it depends on two major factors:
- how long after your typical invoice aging before you take action
- type of debtor you need to collect from (see above)
In most cases you will not recover 100% of what’s owed. It’s just not realistic, and even very successful commercial collection agencies will offer terms to your former clients in order to recover what’s owed to you.
With this in mind, it’s a fair question to ask any agency before you hire them regarding what you can expect to regain (in terms of a percentage) and how long it might take to recover that amount. Any agency worth hiring should be able to answer those questions to a degree based on their track record. And depending on what state you live in, commercial property management businesses may not be entitled to collateral forfeited in a foreclosure or bankruptcy.
In most cases, you can expect to collect between 80% to 25% of what is owed to you.
Why outsource your collection efforts?
One word – compliance.
New Federal regulations govern how a debtor can be contacted. By shifting compliance requirements to an outside firm you severely reduce or limit your exposure to liability for failing to comply with State and Federal Law.
And though you may think that it’s expensive to work with a collection agency, the reality is that many (or most) work on contingency, meaning that they only get paid if they collect on your behalf. I will say, however, that if your total outstanding revenue is below a certain amount it might be a good idea to speak with your accountant.
After all, in some situations you may save more money in the long term by filing this on your taxes as a loss.
Find the right collection agency today
Save time, money and aggravation by hiring a professional who can help you collect some (or all?) of your outstanding revenue.
Click the link and compare free collection agency quotes today.
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 work with a commercial collection agency that can help you recover what’s rightfully yours.
Either way it’s your money… you decide.