Accounts Retrievable Systems - Collecting Bad Debts
It is indisputable that bad debts cause the downfall of a business or company. Receivables from customers are common practice in any business establishments. It is not always purely cash-basis transactions. There are issued checks that bounce and therefore form part of accounts receivables. There are payments for merchandise that are not collected. This is a very crucial part of any business organization.
And in this current economic downtrend, it is again common to encounter customers who cannot service their debt payments. What does it entail to make a possible collection? You have to track down the exact location of the defaulting client. You have to make telephone calls, write demand letters. The effort is there but you get zero collection results.
Today there exist companies engaged in the service of debt collection. These are fully trained and experienced people. It would not be difficult to go to this company should you fail in collecting your receivables. Many of them only get their fees when they collect; which usually is a percentage of the amount collected. These firms incorporate legal processes in the collection scheme. You may hire the firm under a “no collection, no fee” agreement.
Initially, you have to carefully choose your collection agency. Why? In this collection business, it is difficult to transfer and re-assign your account. Even if you feel there are no results, it is difficult to cancel any existing arrangements. Thus, when you initiate hiring a collection agency, be sure on the firm’s effective collection function. It is also better to seek a collecting company that combines the collection and legal functions.
Thus, the firm has lawyers to legalize every transaction and collection step.
Another factor to consider when you intend to indulge the services of a collecting agency is the rate. Although the contract may start as a “no collection, no fee” arrangement, you should also know the percentage fee once collection is made. As there are firms engaged in this activity, you can choose which gets the lowest percentage fee. Determine also the established rate of collection success. What percentage of the debt is amassed? How soon does collection start? And how is the payment made? All these can be tackled by your servicing firm.
Still other factor to consider in searching for the collection agency is the methodology utilized by the firm. One that collects using the “moving target” theory is effective. You know that debtors sometimes get immune to the standard practices and approaches of a collecting organization. Debtors are very good in evading payment and so your servicing firm must be able to adjust to the delinquencies of the defaulter.
Choosing an attorney-driven collector can bring better results. You are aware that collection letters sent and signed by a legal counsel usually draw attention from the debtor. This is for fear of any lawsuit. Thus, the probability of response from the defaulting client is usually expected. And once this happens, payment of receivable is imminent.
So – if your firm is experiencing problems of uncollected debts, waste no time. If your collection efforts had already failed, then it is time to search the internet. Look for a qualified collection agency – one that combines collection and legal functions.
Call Accounts Retrievable System For More Info at (800) 327-4687