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Why and How You Need to Report Direct Payments to Business Debt Collection

Jul 28, 2021

As a business owner or manager, you’ve spent a lot of time reaching out with reminders, notices, and phone calls. In addition, you hired a business debt collection agency to continue collection efforts, which is always a great step.

When collection agencies call and send bill reminders, they work with your customers on your behalf to collect money that the agency shows as owed, remitting payment to you less a small fee. However, some customers rather not pay the collection agency. Instead, they will pay you directly.

Direct payments feel fantastic! When you receive those payments, at last, it’s time to balance your books. However, there’s one more thing you need to do: report that direct payment to your B2B debt collections agency.  Let’s low why this is a crucial step for both large and small business.

Why Report Direct Payments to Debt Collection Agencies

Bookkeeping managers may forget to let the collection agency know that payment arrived. That’s understandable. But there are many critical reasons your team should report direct payments:

  • Reporting reduces the legal risks for both you and your collection agency. The Fair Debt Collection Practices Act (FDCPA) mandates correct balances are placed and maintained during the course of a collection account. Obviously, we both want to comply with these laws.
  • You’ll see a reduction in customer service complaints. Many of your clients and customers will not understand that the calls they receive about that overdue bill are not from you. As far as they know, they paid that bill. Aside from the legal implications, our continued efforts could be taken as harassment if you don’t inform us of payment.business_debt_collection_direct_payments
  • You’ll reduce errors in collection fee added balances. If you’re currently adding the fee to offset your collection agency’s fee, it’s important to make sure the balance is reflecting the true amount so the calculations are accurate on the collection letters.
  • Reporting direct payments means your collection agency can maintain an accurate recovery percentage of its performance.
  • Communicating with your agency also helps prevent false credit reporting about that consumer by either the collection agency or your company.  

How to Report Direct Payments to Your Collection Agency

Commercial collection agencies each have their own collection processes for debt recovery. In the end, it’s all about communication and what is best for your team for reporting direct payments. You can email, call, or send a monthly payment report.

At Capital Recovery Corporation, a premier business debt collection agency, you can report payments directly via our website. We can even take your monthly A/R Transaction register report and bump it up in our system to discover which payments apply to our accounts. By abiding by debt collection laws and practices, we can safely recover old debt with consumer financial protection practices.

We are a credited debt collection business that abides by the laws of the Federal Trade Commission (FTC) and Financial Protection Bureau.

If you have questions about working with a debt collection agency or the commercial debt collection process, contact us to learn more. Get your AR from debtors back on track now before it’s too late.