A misconception in the collection world is that once a past due account is placed for collections, all efforts on behalf of the client are complete. However, there is plenty that can be done to facilitate a successful collection effort; one that will help you get paid.
Submit Claims Early
A common mistake made on past due accounts is waiting too long to place the claim for collections. Delaying claim placement can affect collectability and increases the risk of a company going out of business or filing for bankruptcy. If the customer hasn’t made any effort to contact you regarding payment or defaults on payment agreements, the claim should be placed immediately for third-party collections.
Provide Complete Documentation and Information at Placement
Collection efforts are more productive and efficient if all details of the claim are provided at the time of placement. Providing information upfront can reduce collection time and can improve chances of collecting amounts due.
Documents and information that can help facilitate collection efforts include:
- Copies of invoices, purchase orders, proof of delivery, etc.
- Accurate and complete debtor information
- Summary of in-house collection efforts and current status of account
- Any correspondence or communication related to the transaction and past due account
- Other credit -related documents (i.e. credit application, letter of credit, personal guarantee, etc.)
Provide New Information
It’s important to keep your collection agency informed of any changes related to the delinquent account. This includes receiving payment, finding out that the company has moved, filed for bankruptcy, or has been sold off to another company.
Respond Promptly to Agency Requests
The window of opportunity for successful collection of a delinquent account is often short. It can become even shorter if requests for additional information are not responded to in a timely manner. Every minute counts in the collection world and creating unnecessary delays can become the difference between a recovered balance and writing the balance off as bad debt.
Trust Your Agency
Most companies will choose a reputable collection agency with years of experience and expertise. It’s important to trust that the agency you choose will represent you honestly and professionally.