Businesses that sell products or offer services in advance of receiving payment have a hard time when customers fail to fulfill their payment obligations. Business owners will be at a disadvantage when they have to spend time tracking down past due accounts. Small businesses with local customers may also find collecting past-due payments more uncomfortable as they may see them around town. Collection agencies are a great option when business owners want to avoid unpleasant confrontations with customers.
Customers unwilling to pay their overdue accounts are a frustrating experience for any business owner. Sending multiple invoices or making repeated phone calls that go ignored can cause undue stress. When business owners encounter customers who refuse to pay what they owe, it is time to take the next step.
Bills need to be paid and an overdue account makes balancing accounts receivable nearly impossible. One of the biggest benefits a collection agency offers to a business owner is time. Staff and resources used to collect the unpaid debt are freed up by the collection agency. This will allow the business to concentrate on other aspects of the business. A business owner may lose sales and miss opportunities when attention is directed solely on tracking down past-due accounts.
Collection agencies have the resources and manpower to locate and contact a debtor. If a business has exhausted all methods of collecting a debt, a collection agency is the best option to move forward. Businesses will need to attempt to make contact and send of letters asking for payment. Accounts that have gone unpaid for four to six months can be turned over to a collection agency, which is a better alternative than writing off the debt.
Businesses often do not have many details about a customer or client. They may have an address or the phone number that is on file, but this is not guaranteed to be accurate. Collection agencies can access a database created by the credit bureaus for a person’s credit history. If a customer happens to submit any type of application for a credit card or other form of credit, then updated information is available.
Collection agencies will gather all the information for an account and then evaluate their probability of success. Many collection agencies receive over 100 or more delinquent accounts each year. This means that resources will need to be allocated accordingly. If the past-due account is too old, then the chance of a successful result is less likely. The reason for this is that a debtor may have moved or the business for an account has closed.Small businesses are better off hiring a collection agency to chase down accounts receivable.
Debbie Trandell is a small business owner who writes about the benefit of using a commercial debt collection agency to recover unpaid debts. When Debbie needed to collect on outstanding debts, she found the exact services she was looking for at www.summitcollects.com.