Debt Collection – The Basics – How To Choose A Debt Collection Agency Which is Perfect For Me?
Unless your business operates on the cash basis, many businesses will face the difficult situation of being stiffed for the payment, maybe due to some bounced check, accident or some debtor neglecting his duty to pay. All this creates a difficult situation for you where you find it cumbersome to collect on all these overdue accounts without any legal expertise.
Nobody would like to get involved in a situation where they would have to continually chase their debtors for payments which are due. However, in some conditions it is unavoidable and this becomes a major inconvenience to the business owner as he is not competent to handle it all alone.
It is a fact that unpaid accounts are detrimental to the business sustenance and growth. Therefore, timely collection of these delinquent accounts can surely save businesses from turning bankrupt. As there are several laws in every state as regards to the fair debt collection procedures which should be followed, it is usually difficult for in-experienced people to undertake collections in a proper way. Therefore many businesses today hire the services of an efficient debt collection company for taking care of all their unpaid debts by collecting them.
In several cases, companies have just limited access to the vital information about their customers. An experienced collection agency incorporates advanced technology which permits them to do proper research on the customer before proceeding further to collect debt from him. Therefore, by adopting these methods they gain complete knowledge about customers who owe money before making demands or suggestions to them to repay the amount. These extra details secured by the debt collection company makes the collection process fast and efficient.
A collection company usually takes its fee from the actually collected dues, therefore unless it gets a debtor to pay up, it won’t get paid. These debt collection companies are legally certified and protected by the Errors and Omissions Insurance, which completely protects your company in case of any mistake.
A professional debt collector knows the rules and regulations in a fair debt collection and is experienced in dealing with all types of customers at professional and personal level. The commercial collection company will be aware of what they need to do for collecting your unpaid debts. Mostly agencies prefer to talk with all your overdue account holders and try to ascertain as to why they have not paid the amount which was due from them. In case they are not in a position to pay the entire debt immediately, these agencies work with the customers to work out some payment plan. If the customers just forgot to pay your debt, then a debt collector will usually act as a very firm reminder to them.
Apart from this, there are several other services available to the clients from a debt collection company, beyond just contacting the debtors and securing the unpaid money. Several agencies even communicate through email or fax with their clients to provide them important updates on their current situation. This also includes any alerts on the receipt of payment from some customer or when a particular company goes out from a business.
A final demand letter is another important service provided by the collection company which makes the debtors aware that business is really serious about the return of debt. A demand letter on the letterhead of debt collector lets a customer know that their situation has turned serious and the original company no longer desires to handle it. Normally this action yields immediate results most of time and helps in avoiding any legal action.
If all other options have been explored and still there is no chance of debt being recovered, legal action may become necessary. In such cases, a debt collection company may handle this debt in the litigation stages as well. Such companies have lawyers in their National and International network everywhere. Clients have the comfort of not dealing with multiple agencies or paying any upfront fees to attorney as they need to pay only the filing charges. They also act as middle man so that a company requires only one contact person for all their cases.
Ideally a business to business debt recovery must be based on some amicable mechanism for achieving success with the collection of residual debt amount. The pattern of communication must clearly be according to the FDCPA instructions. Any type of deceptive or contempt information in the communication can immediately result in the violation of the law, which can impose a civil liability.
Before hiring a collection agency, you must do adequate research to locate a company which will work as per your company’s requirements. You can consult other businesses in your sector for recommendations and they will be happy to share this information with you. You must also ensure that the debt collector has prior experience in managing the type of debts which you need collected on; a distributor of hair products would not like to use a debt collector who specializes in the unpaid grocery bills.
The debt collection mechanism for businesses involves appropriate integration of requisite technology as well as experience. Tools like automated messaging service can easily be incorporated for gaining timely results. Collection agency should possess all the basic skills like investigative ability and persistence in order to track the debtors. Actually business to business collection requires organized and systematic strategies combined with some strong tactics to accomplish the mission.
You should also ensure that commercial collection company which you would want to hire possesses a valid license for collection in your state. Hiring some collection company which is not licenses in your specific state can lead to some serious legal issues in future, so you must verify and make requisite research to find a collection company which is just right for your requirements.
In closing, hiring the services of commercial collection agency is a smart way to collect all your overdue debts without any wastage of your man-hours or company’s time. You can easily regenerate income which you once considered as gone in a legal and safe way by hiring an efficient debt collection agency.
To get started today, call our toll free 1-877-680-6064 to speak with an associate or fill out the form above and we will contact you within 24 hours.