Whether from medical bills, real estate, student loans, or credit cards, debt is never fun to have. For business owners, especially small businesses, the collection of bad debt from customers’ past due bills can take a toll on a company’s cash flow and progress. Let’s examine how your business can speed up debt recovery with the help of a commercial debt collection agency.
Bad Debt Collection Agencies
Professional debt collectors have no previous association or connection with a business (the original creditor). As a third-party service, they recover debts from clients or customers (debtors). Many times, collectors oversee, guide, and have management specifically over accounts receivable (AR) departments. Therefore, accounting departments are not overworked dealing with debt collections and can focus on more important things.
The 90 Day Red Flag
To start, is your company is dealing with overdue customer payments of at least 90 days? If this is the case after your own multiple efforts of calling and sending emails or letters, you need help. After the 90-day mark, legal action must be taken at a different or higher level.
Third-party Involvement
It is very common once your clients start getting notifications and calls from a collection agency, then this is when a bill is finally paid. Debt recovery percentages overall are higher when working with debt collectors than if you were to do the work alone. While agencies take a fee for the collection of your debt, the time and stress saved from doing it yourself has been worth it for many corporations and small businesses.
Fair Debt Practices
If you and your staff are new to debt collection, this could heavily be affecting how much debt you recover. Do you send out professional collection letters on business letterhead? Are you using stern, yet empathetic language and tones on the phone? Have you been threatening in any way? Every credible collection agency follows the Fair Debt Collection Practices Act (FDCPA) under the Federal Trade Commission.
Bad Debt Recovery
It is crucial to recover as much bad debt possible that is owed to your business. Reason being, past due payments can affect your company’s credit score and if you are looking to get financing. If someone were to look at the information presented on a balance sheet, your accounts receivable would be seen as a concrete asset. In other words, how strong your AR is, will be an indicator if you will be able to acquire certain financing or other loan needs.
Accelerating the collection of bad debt recovery will show that your business is profiting. Balance sheets showing slow recovery progress are a warning sign to others that your business is slow to profit.
Commercial Collection Agency
Collection agencies like Capital Recovery Corporation (CRC) in the Atlanta-metro area have decades of experience working with healthcare and insurance overpayment, plus commercial debt collections recovery.
Learn about why working with CRC could save your business and sanity.
Capital Recovery works with you or your AR team in the collection of bad debt owed. Most importantly, they will create a future plan for successful debt recovery.
Contact CRC today to learn the first steps to improve cash flow and profit. Make your business grow and prosper with CRC. Let them do the dirty work for you.