Debt Collection Agency

11 Questions for Choosing the Right Debt Collection Agency

shutterstock_124086634There is no hard and fast rule for when a business should consider passing its outstanding debts on to a collection agency. For some businesses it is when unpaid invoices go beyond 90 days, while others make the decision when the cost of collection exceeds a specific value.

Whatever the time frame, unless you have a highly efficient in-house collection department, there will inevitably come a time when you have exhausted all other avenues and must either write a debt off or give it to an expert to pursue on your behalf.

Should you get to this point and consider hiring a debt collection service, there are 11 questions you should ask potential candidates that will ensure you choose the one that is the best fit for your needs.

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Why You Should Use Professionals to Investigate Debtors

If you provide products or services to people on credit, the chances are at some time or another you will have someone defect on their payment. While most businesses should have a debt recovery procedure, such as sending out invoices and reminders, this still doesn’t help if someone simply refuses to pay. So what do you do in this situation? If you want to bypass dealing with the legal system, and yet still want to get your money, your best option is to hire a debt collection agency. The following are the major advantages of doing so.

Debt collectors know the law

One of the main advantages associated with hiring a collection agency is that they are knowledgeable when it comes to the law. Since there are many laws associated with debt collection, trying to learn them all yourself will simply waste time and energy on your part, when instead you could just hire someone who already knows the ins and outs of the system.

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Common Excuses for Unpaid Bills

A percentage of debtors failing to pay their bills is an unfortunate reality for many businesses. Increasingly, small businesses are not only experiencing financial hardship but are facing collapse as a result of some customers not paying their bills. This is where debt collection agencies can help.

Debt collection services, because they offer specialised professional support, skills and techniques to encourage the recovery of debt, represent the best option for many businesses to recover all or part of the funds they are owed. In fact, in difficult economic times, a debt collection service can be an absolute lifesaver for businesses — and the factor that can help them to avoid making substantial cuts, redundancies or even ceasing to trade.

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Can Your Debtor Afford to Pay?

When a business provides the option of credit to customers and clients, it runs the risk of debtors failing to pay. When a debtor does not settle their account in full and by the agreed date, it is critically important that prompt action be taken to chase payment, as the longer a debt remains unpaid, the greater the chance the debt will never be recovered.

Problems that can arise when credit is offered:

Debt collection services are needed when the livelihood of a business is jeopardised by late payment or non-payment of invoices for products or services provided. Too often, businesses write off bad debts and fail to take the timely, assertive and proactive actions necessary to recoup funds from debtors.Collection agencies have specialised skills, knowledge, experience, expertise and resources that provide the best possible chance of outstanding monies being paid and negotiations with debtors occurring in respectful ways that can preserve the relationship.

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3 Things to Know About Field Call Services

Debt recovery services employ a range of specialised and unique strategies to encourage the debts to be repaid to their clients. Because so many businesses lack the internal resources and experience, knowledge and skill to successfully chase outstanding monies, debt collection agencies are incredibly important to their ongoing profitability and livelihood.

Essentially, a debt collection service will initiate actions to encourage payment from debtors. Acting on behalf of creditors, the agency will use an approach that is tailored to the needs and situation of their client and will work with debtors in a range of ways.

Field call services are one of the specialised services offered by many debt collection agencies. Here we take a closer look at what is involved in a field call service.

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