4 Ways Account Receivable Collections Benefit Businesses
January 3, 2020
Over 70 million Americans had a collection attempt between 2016 and 2017. As more and more account receivable collections pile up, businesses without the expertise needed to collect could risk losing thousands of dollars to wayward debt. For this reason, working with debt collection services is crucial for ensuring that your delinquent accounts receive the payment they are owed.
Four Reasons Account Receivable Collections is Best Left to Professionals
- Expert Insight
An accounts receivable collectionagency is staffed with professionals who know the best ways to solicit collections for delinquent accounts. This level of expertise can be impossible to come by if you’re attempting to handle collections in-house. But they can be the deciding factor between a successful recovery and a lost profit. In this way, agencies benefit businesses by having the knowledge and skills to more successfully collect owed payments. - Faster Payments
Accounts receivable collections agencies are also adept at getting you the payments you are owed more quickly. By employing proven techniques and by being able to negatively impact a debtor's credit score, past-due accounts are more likely to be paid by the delinquent party. In the event that payment is unable to be secured, a professional debt collection service can provide additional support that can allow you to deduct the lost amounts during taxes. - Improved Documentation
Account receivable collections firms are also able to provide meticulous documentation of their collection attempts. This allows you to retain proof in the event you decide to claim a tax deduction based on the lost payments. In the event of an audit, you’ll have proof of attempts to show the IRS and prove legitimacy. This documentation can also help in the event a customer decides to sue. By being able to present proof of legal and legitimate collection attempts you can absolve yourself of wrongdoing and win almost every case. - Increased Focus
Working with account receivable collections can also allow your own staff members to focus on their current jobs and tasks, instead of being sidetracked in an attempt to track down delinquent payments. This can cause productivity to suffer and has the potential for legal trouble if you’re unversed in the laws regarding collections. In this case, it’s best to let your staff focus on their own jobs and leave the collecting to the professionals.
Professional collection agencies can benefit businesses of all sizes and of all types. Featuring many different plans, some firms will work based on a flat fee while others will work on commission. Depending on your needs, speak to a collection service about what programs they offer. Collection agencies are the best way for businesses to collect unpaid debts. If you’re tired of struggling with collections, consider turning to the professionals and experiencing these benefits first hand
Consumer debt rose to 3.95 trillion in September 2018. If your business is owed money in delinquent payments, you know the struggle of trying to collect the due amounts on your own. This process can be difficult for businesses and even has the potential for legal problems if not handled correctly. If your tired of trying to collection on your own, here’s why you need to hire professional business debt collection services. The Top Five Benefits of Business Debt Collection Services Legal Backing A professional debt recovery agency understands the laws involved in successful debt collection. This enables them to recover debt, or make attempts, without risking legal fall back from customers. Customers can sue for a variety of reasons, and if you don’t know the laws you could get up losing out. By allowing a debt collection agency to act on your behalf, you help protect yourself and your business from any legal fallout. Successful Recovery Business debt collection services have experience collecting debts, and working with them can significantly increase the chances of payment. This is because they know the most effective techniques to use, and also have the ability to negatively impact a debtor's credit score for up to seven years. The threat of lowered credit can sometimes be enough to make debtors seek repayment plans. Flexible Options Debt collection services are also great because they are flexible enough to work with various different business types. For instance, some can be hired for a flat fee, while others work off of commission. If you’re interested in hiring business debt collection services, speak to them about the different programs and options they offer to ensure you get the right services for your business. Documentation Records will be made of every collection attempt made by a collection service. This benefits your business by giving proof of attempts that can then be used to claim the debt as a deduction when you file taxes. These documents show the IRS that multiple legitimate attempts were made before you claimed the deduction. In the event of an audit, the IRS will be able to see these documents and won’t be able to penalize you. Faster Payments Business debt collection services also tend to make people pay faster. Due to their expertise, they are able to track down past-due clients and make the necessary collection attempts needed to get them to pay. This can be by setting up payment plans with them or by impacting their credit score. Either way, you’re more likely to get paid sooner than if you were to attempt collection on your own. Debt collections services can save businesses a lot of headaches, and if your business is struggling with delinquent payments, consider reaching out to a professional collection service and seeing that their expertise can do for you.
In 2016, debt collection services collected a combined total of $78.5 billion for businesses who would have otherwise lost out on profit. While you might not have considered partnering with an accounts receivable collection agency before, the truth is they can be a valuable asset to business owners across the United States. If you’ve been struggling to collect delinquent payments, here are a few reasons why you should hire a collection agency. Taking the Burden Off of Your Business Calling every delinquent customer yourself, or designating members of staff to do so, can eat up a lot of time in a day. This takes the focus off of other tasks and can negatively impact interactions with other customers because they won’t get the adequate attention that they deserve. By hiring an accounts receivable collection agency you help save your staff time and leave this task to the professionals. Time saved this way can even be used working on improved credit procedures to help prevent future debtors from abusing your current system. Improves the Likelihood of Payment An accounts receivable collection agency knows the tricks of the trade. They’re trained in professional collection techniques and know-how best to get through to debtors. Debt collectors also know how to use collection laws to their advantage, protecting you from legal fallout, and better ensuring that debtors can’t try and use collection attempts against you or your business. Additionally, collection agencies are able to negatively impact the credit scores of debtors for up to seven years. The threat of this alone is often enough for people to set up payment plans. Expert Insights An account receivable collection agency can advise you on every aspect of the debt collection process. They may also be able to provide insight into financials and how best to tailor your payment protocols to promote on-time payments. Collectors know the process and can provide valuable insight that you can’t find anywhere else. Legal Protection Collection agencies are well versed in the laws and legal processes of debt collection. Without their aid, you could risk accidentally infringing on a debtor’s rights and end up in a legal battle. Additionally, if you’re forced to go to court over an uncollected debt, a debt collection agency will be able to provide documentation and proof of lawful collection attempts. This documentation also comes into play should you file the debt as a tax deduction. If audited, this documentation will serve as proof that attempts were made before you claimed the deduction. Furthermore, if you do decide to take a collection claim to court, a collection agency can take care of most of the process for you. In some instances, they will even provide their own lawyers to represent your claim. This not only takes a great deal of the burden off of you and your company, but it can result in a great chance of success overall. If your company is struggling with unpaid debts, consider these benefits and contact an accounts receivable collection agency near you. The longer you hold off the less likely it is that the debt will be collected. If you’ve got outstanding accounts that are delinquent more than 90 days, now is the time to side with the professionals.
Payments for goods and services are important for keeping any business afloat. However, sometimes customers fall behind or otherwise try to get away without placing payment for the product or service they received. While we’d all like to think of our customers as being fair and honest, it’s important to have a fallback in case something goes array. To help manage this issue, your business should consider working alongside a receivable management collection agency. A debt collection agency can be an important tool when it comes to receiving payment for debts owed to your business. On your own, it can be difficult to find time to write letters or call clients in an attempt to collect delinquent payments. A receivable management collection agency takes this burden off of your shoulders and instead handles all debt related communication attempts. Overall, 29% of all debt collected by a debt recovery agency is received in under 90 days. This alone should sound appealing to most business owners; however, if you need further encouragement, here are a couple more significant benefits these agencies can provide. Protection from Legal Fallback Debt collection is stipulated by many different laws, and if you’re unfamiliar with these laws, you could risk legal trouble if a customer feels their rights have been violated. Debt collection and recovery services understand these laws, and as such can make the proper collection attempts while being sure to stay on the right side of the law. This can help you both receive payment faster, and be protected from any legal action ornery customers might try to take. Successful Collections A receivable management collection agency also has the experience to successfully collect debts. The odds of successful collections significantly increase when you have a debt recovery team on your side. Because of this, you can focus on running your business, something that could be significantly impaired were you to try and track down individual debt by yourself. Additionally, collection agencies know how to coerce debtors into paying what is owed. One specific way being by negatively impacting a delinquent individual’s credit score for up to seven years. Often times the threat of credit score impact is enough to make debtors pay what is owed. Flexible Programs Collection agencies know that no two businesses are the same. Because of this, they can offer different programs to better suit your collection needs. Some offer a singular flat fee for their services, while others operate via commissions collected per successful collection. When speaking with a collection agency representative, ask them about the programs they offer and see which options would work best for your business model. Proper Documentation Every communication attempt is recorded by a collection agency. This is helpful should you decide to sue a debtor in the future as proof of collection attempts will be available. To a court, this demonstrates that you have exhausted other methods of collection before bringing the claim to a lawful authority. Additionally, these documents can also allow you to claim the debt as a tax deduction. During an audit, you can use these files as proof of collection attempts before resorting to claiming the deduction. Faster Collection Overall, when working with a debt collection agency, you’ll find that delinquent individuals tend to payout faster. No one wants a debt collector hounding them, and in the end, will find it easier to set up payment arrangments than attempt to dodge what they owe. This not only takes the burden off of you, but it allows your business to receive the money it is rightfully owed. If your business is struggling with managing debt collection, consider contacting a professional receivable management collection agency. They can help collect your debts quicker, protect you from legal fallout, and offer proper documentation should your case ever go to court. As stated above, many also offer specialized programs so that you can be sure to find an option that works best for you and your business.
