As a business, having unpaid customer balances, is a fairly common occurrence. The reality is that there are always customers who do not submit payments on time, if at all. A collection agency can benefit your business to help reduce bad debt and turn your accounts receivable into cash. Many companies lack the necessary resources to effectively manage their accounts receivable portfolios. This is one of the many challenges that businesses face when collecting debt. Below are examples for when a business should engage a collection agency:
Promises of payment are not fulfilled: An account can default on payment by stating a check is on its way or by failing to commit to a payment plan. These actions demonstrate the account’s inability to pay, which can be a voluntarily action or as a result of limited cash flow within their business. False promises of payment is a serious warning sign that collection services are required.
Business is unable to contact the delinquent account: Businesses often struggle to obtain valid contact information. Even in cases where contact information is successfully obtained, attempts to reach the contact can go ignored. Collection agencies utilize tools, such as skip tracking, to locate appropriate contact information.
Multiple requests for documentation are made: Providing documentation to the delinquent account more than once is a common delay technique and is time consuming. These types of requests can cause unnecessary delays in collecting payments. Collection agencies have the experience to quickly identify delay techniques and understand how to handle them.
Business is unable to come to an agreement regarding outstanding balance: After explaining collection terms and requesting immediate action, the delinquent account is unwilling to come to an amicable compromise for payment. Collection agencies are experts in prompting payments and working out payment plans to result in full collection of debt.
Remember, engaging a collection agency early in the collection process can yield more positive results!!!