Unless your business only takes cash, most businesses will encounter the problem of being stiffed for a payment, whether by accident, like a bounced check, or by a debtor neglecting their payments. It can be very difficult to collect on these overdue accounts without the proper legal training. That’s why most businesses hire a Debt Collection Agency to take care of their unpaid accounts and collect them.
Unpaid accounts can be detrimental to a business. However, collecting these delinquent accounts can often save a business from going bankrupt. Since there are numerous laws in place in regards to fair debt collection practices that must be followed, it is often very difficult for untrained people to make the collections properly.
Hiring a commercial collection agency is the best way to collect on delinquent accounts. Most collection agencies take their fee out of the actual collection, so unless they actually get the debtor to pay up, they usually don’t get paid. They are also legally certified and usually protected by Errors and Omissions Insurance, which keeps your company safe in the event of a mistake. A professional collector will know the regulations and rules in fair debt collection, and they have experience in dealing with customers on a personal and professional level.
A commercial collection agency will know what to say and do to collect your unpaid accounts. Most agencies will talk with your overdue account holders and try to figure out why they were unable to pay what they owed. If they just could not afford the full bill, they’ll work with your customer to figure out a payment plan. If they just plain forgot about the debt in the first place, a commercial debt collection agency can often act as a very persistent reminder.
Before hiring a commercial collection agency, you should do a little research to find the company that will work best for your company’s needs. If you ask other business owners in your industry for personal recommendations, they will often be more than happy to share the information with you. You should also make sure the collections company has experience in dealing with the type of accounts that you need to be collected on; A hair product distributor probably would not want to use a commercial collection agency that specializes in unpaid medical bills.
You also want to make sure that the commercial collection agency you are considering has a license to collect in your state. For example, my agency (Enterprise Debt Recovery) specializes in corporate accounts and is licensed in Illinois. This means that we can collect on overdue payments for corporations in the state of Illinois. Hiring a company that is not licensed in your state could lead to serious legal repercussions in the future, so make sure that you do your research and find the agency that is right for your needs.
In closing, hiring a commercial collection agency is the best way to collect overdue accounts without wasting your company’s time and man-hours. By hiring a debt collection agency, you will be able to regenerate income that was once lost to you legally and safely.