Is It Time to Hire a Debt Collection Agency?
August 1, 2019
Americans seem to be struggling with debt more than ever. Between student loans, unpaid medical bills, and other financial woes, it's no surprise that roughly 70 million Americans were contacted about debts or were pursued by debt collection services between 2016 and 2017. But while you might be sympathetic to their struggle, the reality is that you, as a business owner, need to pay your bills, too.
Unfortunately, not every client or customer will be prompt with payment; in some cases, they may do everything they can to avoid paying their debts. And at a certain point, you might need a bit of help in obtaining what's owed to you. That's typically where debt collection and recovery servicescome in. Hiring a debt collection agency may seem like an extreme measure, but it's ultimately one of the most effective ways to ensure that you have the cash flow you counted on to keep your business afloat.
But how do you know when it's time to start thinking about your need for debt collection and recovery services? The following signs will indicate that you shouldn't delay this step any longer.
Signs It's Time to Hire a Collection Agency
- Your Receivables Are Way Overdue: As time goes on, it becomes more difficult to collect the debt you're owed. That means that once the past-due date reaches the 90-day mark, you'll need to take action. It's extremely rare for a business owner to be able to collect debt after this point, and it may even be challenging for a debt collection agency to do so. However, the chances that your agency will be able to collect the debt will be much higher than if you were to continue trying to handle it on your own. This is especially true if you have several debts owed to you that are more than 90 days old. After three months of waiting, the time for being understanding has passed.
- Your Business is Struggling Due to Owed Debts: When you're forced to chase down your debtors yourself or your cash flow problems persist due to moneys owed, your business will undoubtedly suffer. Your daily operations will likely be interrupted, as your customer service and product delivery may be impeded by the need to focus on the debts owed to you. You may even experience issues with being able to hire the staff you need or replace necessary equipment as a result of poor cash flow. You literally cannot afford to take these kinds of risks with your business. Although you may be inclined to DIY your debt collection, doing so is often to the detriment of your organization. By seeking help from the professionals, you can devote your energy to more important aspects of running your business and increase your chances of receiving what you're owed.
- You Keep Getting Excuses or Delay Tactics: While customers who owe you funds may not be inherently bad people -- they may just have found themselves in over their heads -- people in desperate financial situations may not always act nobly. They may feed you excuses about your check being in the mail or they may say anything to get you off the phone. They may even mail checks to you that subsequently bounce or might seemingly disappear off the face of the earth. They might hope to buy themselves some time or to frustrate you so much that you give up on these debts. But if you're tired of being subjected to the run-around and simply want to get paid and move forward, working with debt collection and recovery services may be the best way. Making sure you have the upper hand in this scenario can make a world of difference.
Although you might not like the idea of hiring debt collection and recovery services to retrieve the funds owed to you, there are some situations that really leave you with no other choice. If you're struggling with the aforementioned points and need help retrieving the money clients owe you, we're here to take over. For more information on how we can help your business, contact us today.
Four Reasons Account Receivable Collections is Best Left to Professionals Expert Insight An accounts receivable collection agency 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.
