You’ve given them the benefit of the doubt and watched as 30 days passed, then 60 days, and now the bill is more than 90 days past due.
You’ve made phone calls and sent letters, exhausted all your resources, and the payment has still not come in.
What else can you do?
Many businesses choose to hand over their debt recovery to an outsourced company and reduce the stress and work of taking it on themselves.
Hiring a company like Sherman Oaks Accounting & Bookkeeping powered by One Source Services to streamline accounts receivable and follow-up on late invoices will save time and resources so businesses can focus on other things.
Our friendly, professional staff has an excellent recovery track record and sets the standard for customer service, so you can rest assured that your clients will be treated well even when we are collecting a debt.
Occasionally, we run across an account that we believe should be referred to a commercial collections agency. In that case, we’ll let you know and we’ll even help you find one.
That said, what exactly is a commercial collections agency?
Commercial collections agencies, sometimes called business-to-business or B2B collections agencies, make it their business to dig deep and recover money owed to businesses by other businesses. They have special resources, experience, tools, and tactics that greatly increase the chance of recovering debt.
Is a commercial debt collector the right choice for your business? Ask yourself these questions:
How long has the account been delinquent?
The older the invoice, the harder it will be to collect what is owed.
Have you followed-up? Sometimes, a late invoice was only an oversight and a business simply forgot to pay. Following-up with reminders including phone calls and letters might be all that is needed to remind them to pay.
Have you heard from your client? If the client has been in touch lately, then there’s probably a good reason why they haven’t paid. On the other hand, it should raise a red flag if they stopped communicating or seem to have suddenly vanished.
Have you tried to work it out with the client? Often there are factors you may not have considered; perhaps they are waiting for a large payment to come in before paying, or maybe your invoice was delayed during their approval process. You might find out when you touch base with them and perhaps even work something out.
On the other hand, if you decide to directly outsource to a commercial collections agency, then it’s important that the agency you pick has:
License and insurance: States require that agencies be licensed within their state. Make sure they have a current license and are insured.
Experience: Try to find an agency with collections experience in your specific industry. It helps for them to understand the nuances of your business, although it’s not required.
Good Communication: How will they loop you into what’s happening with your accounts? You should be informed in a timely manner about what’s going on. And if you have a question or need to reach them, they should be very responsive and easy to talk to.
Here are some suggestions on how to start looking for a B2B collections agency:
Get referrals. Word-of-mouth recommendations from people in your network are valuable. Ask trusted friends, colleagues, and family members which agencies they’ve used and get their feedback about the service they received.
Do your research. Treat this as you would any potential business relationship, with due diligence. Ask the Better Business Bureau if the agency under consideration is on their certified collection agency list and find out if anyone has filed a formal complaint about the agency. Look them up online and see what other clients have said about their service.
Go to the CCAA for recommendations. The Commercial Collection Agency Association certifies agencies that follow strict criteria and can provide you with a list of their certified agencies.
Now that you’ve selected a commercial debt collections agency to represent you, what can you expect?
DESPITE WHAT YOU MAY HAVE HEARD, COMMERCIAL DEBT COLLECTORS DO NOT HARASS PEOPLE.
The federal Fair Debt Collection Practices Act established strict guidelines that govern collections activity. For instance, debt collectors aren’t allowed to contact debtors at inconvenient times (they are restricted to call only within certain hours) or places (a personal debt may not be collected at the debtor’s workplace, for example).
They are not allowed to share financial information with third parties, either; your clients’ information privacy is protected.
Before we do anything else, we always take a close look at a business’s accounts receivable to learn more about their finances and why they may have unresolved debt. An outsourced B2B collections agency should do the same.
They may also investigate your debtors to determine why their account may have fallen delinquent. They have resources to determine whether your client is financially capable of paying.
In the event that your client is unable or refuses to pay, their team of lawyers will help with any necessary legal action. Plus, they will keep the agency current on debt collections laws and regulations so that your business remains compliant.
If you’ve done your research and see that the stress-relief, time savings, and potential recovery results are valuable to you, then it may be time to bring Sherman Oaks Accounting & Bookkeeping powered by One Source Services on board to help with debt recovery. Let the professionals decide when it’s time to take the leap and involve a commercial collections agency.