All businesses at some point in time will come across troubles of dealing with past-due accounts receivables. The important things to remember are a few key points regarding the delinquent AR. You must identify how extended the line of credit is or the terms regarding the agreed pay schedule you had with your client. Knowing the full extent of any terms and conditions between you and your customer will help you the most when it comes time for you to collect. The situation will be different however if you are dealing with a COD or Cash on Demand account. With any COD account that has not been paid in a timely manner, action must be taken quickly to ensure the return of funds or product. Once you realize that they are past due Net 30, 60 days, etc. you should contact your in-house collections department. Some large businesses will have their internal process, but once you have exhausted all of your resources of unreturned phone calls, emails and visits, an outside source may be desirable.
Methodology
Collection agencies come in a variety of specialties; they can handle anything from personal and consumer debts to the business to business type debts. It is imperative that you research for a legitimate agency that not only specializes in the kind of collections you need but also has the right tempo that you want. The tempo of an agency can make or break your relationship with your customer. Not all delinquent accounts are generated because someone is a purposefully trying to steal from you; occasionally it may be a confused new accounts payable person who just took over the position. There are cases where you don’t want a “hammer” or “bulldog” of an agency potentially ruining your relationship with a long-term customer over a misunderstanding. In lieu of that, you don’t want the soft gloves approach used on someone who has not only stopped paying their bill but has proceeded to run up credit with your local competitors. If you ask the right questions when talking to a new potential agency you may be able to find out if they are flexible in their collection methods.
Tools of the Trade
Their credit reporting, license and bonding and rates are just a few of the topics you will want to ask about. Skip tracing is an essential tool used by most agencies to find any person or company who may be in hiding. Skip tracing also is helpful if the agency that you hire offers the service of credit checks. Having corporate credit checks done on any new potential customers will drastically improve new business prospects and reduce the chances of a bad deal. Along with credit reporting and legal expertise, the fully encompassed collection company will have everything that you need.
Another option to factor in your decision of selecting an outside source for help is the rate at which you will pay. There are companies out there that will make you sign a contract and pay a fee no matter how successful they are in collecting or not collecting your money. Your best bet is to find an agency that works off of contingency. That means if they do not collect, you do not have to pay. The rates for contingency can vary depending on the age of the account, the total amount, local or international etc. Some collection agencies even will have associations or industry special rates designated. Rates can also be determined by the size of the balance needing to be collected. Some collection agencies will not take any account under $500 while others can’t handle anything above $100,000.
Regardless of the size of your company or the size of your debt, you can always call us for help. We are open, reliable and thorough in our work. To find out more about how Burt and Associates can assist you with your debt collection needs, call us at 1-877- 740-7839. Let us find your best solution to your debt recovery today.
