| How Using Commercial Collection Agencies Can Save Your Business |
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| Written by David P. Montana |
| Thursday, 09 July 2009 05:23 |
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In these difficult economic times, effective collections can mean the difference between a successful business and a failure, but few small businesses consider the use of commercial collection agencies. Using commercial collection agencies may seem like an expense you can't afford, but in the long run it pays off big time. Commercial debt collection simply gets you more money more quickly than you can accomplish on your own.
In these difficult economic times, effective collections can mean the difference between a successful business and a failure, but few small businesses consider the use of commercial collection agencies. Using commercial collection agencies may seem like an expense you can't afford, but in the long run it pays off big time. Commercial debt collection simply gets you more money more quickly than you can accomplish on your own. Commercial collection agencies handle the collections process quickly, effectively and professionally, freeing your employees up for business-growing tasks. Think about it-you would not ask your accountant to handle your company's advertising, would you? So why should you require her or your salespeople to handle collections? Once you've found a list of potential commercial collection agencies, it's time to interview them regarding their success rate. It's best to pick an agency with a higher success rate, and ask for documentation to prove their claims. An agency that charges 40% of returns as a fee but has a 75% success rate is preferable to one that charges 30% and has a 50% success rate, for example. Commercial collection agencies have more clout with clients than in-house debt collectors as well. Chances are if your client isn't paying on time, he or she has major cash flow problems and is playing triage with bills. The vendor who shows a serious commitment to debt collection by hiring commercial collection agencies is the vendor that will get paid first when there's not enough money to go around. Commercial collection agencies also successfully recover the bulk of their receivables in three weeks or less. We all know in business that time is money, and getting that money quickly helps both your cash flow and your credit score. In addition, the longer a debt is outstanding the more likely it is to remain unpaid, so early recovery is extremely important in debt collection. Commercial collection agencies are experts at recovering receivables quickly. Studies have shown that once the collections process starts in earnest, people who are going to pay are most likely to pay within the first month. Having a persistent debt collector on the case greatly increases the chances of obtaining that money in the first month. When using an agency, there's no cost up front, and no cost at all if they are unsuccessful. Some commercial debt collectors boasting success rates of as high as 98%, even after paying their fee your return rate is likely to be much better than it would be if you did it on your own. Skip traces can also give you an idea of any judgments outstanding against the debtor, which can help you decide how far to pursue the collections process. If your commercial collection agency provides this service as part of their fee, it's a significant reason to choose them. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. David P. Montana has been a noted industry expert, business consultant and writer in collection agencies services for thirty years. He provides more valuable tools and resources on commercial collection consultants and commercial collection agencies. |
| Last Updated on Sunday, 12 July 2009 15:11 |