Three Ways To Know When Your Business May Need A Debt Collection Agency

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Are you having a difficult time getting a particular customer to pay what he owes to your business, and you or your internal credit department cannot handle it? This is just one of the many situations when your business needs to hire a debt collection attorney. Here are a few other ways to tell when your business should contact a debt collection agency to get back your lost profits and improve your bottom line.

If Your Business is Not Equipped To Handle Debt Collection

Some, especially small companies, simply are not equipped with the manpower to handle long term debt collection. A debt collection specialist can spend whatever time is necessary to handle a past-due account or debtor.

If You Are Losing Out On the Bottom Line

If too many of your customers are failing to pay the amount they are due, you could be losing out on those valuable funds that can help your business to grow. If your bottom line is being significantly diminished or you are having a hard time making ends meet with debts active, it is definitely time to hire a debt collection agency.

If You Are Paying More To Deal With Debtors Then The Debts Cost

If you are employing an internal debt collection system, you may be paying much more than the amount of money, time or resources that the debts are equivalent to. This can affect the health of your business’ growth and stability, and damage the survivability of your business in the long term. A debt collection agency only takes money out of amount collected, rather than paying directly out of your pocket. This can save you quite a bit of your hard earned money. 

Speed is Necessary in Debt Collection

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Which single element of debt collection contributes the most to the success, or failure, of receiving the payments you’re owed? Pin-pointing a single “most important” element of the process is difficult, but a strong case could be made for speed. The longer a debt is outstanding, the less likely it will be paid off, it’s as simple as that. For this reason, the most effective collection firms all work on the tightest timelines possible.

Many of our competitors will tell you that collecting outstanding debts takes a long time, and successful collections tend to occur at the end of an extended period of harassment and provocation. This is nonsense. With the right, respectful, and fully legal tactics, favorable debt collection will often occur within 30 days of handing your accounts over to a qualified collection firm. A truly qualified collection firm will be able to achieve fast results using the right combination of intelligently worded letters and non-harassing phone calls.

Cases that aren’t resolved by about a month’s worth of letters and phone calls aren’t going to be resolved by a year’s worth of letters and phone calls. For these accounts a different tactic is required- the threat, and eventual procedure, of legal action. If a debtor will only respond to legal action then there’s no reason to wait to levy this ace-in-the-hole. The explicit threat of legal action is often enough to elicit payment from stubborn problem debtors. For those debtors who still refuse to pay, court action is all but guaranteed to result in a ruling in your lender’s favor.

It doesn’t take a whole lot of time to determine whether a debtor will respond to conventional tactics or whether tougher measures are required. Once this determination is made, waiting around to proceed with those tougher measures will simply delay the receipt of your payments. 

Taking Responsibility as a Collection Agency

Collection agencies don’t always have the best reputations, and often with good reason. Many collection agencies utilize a whole suite of underhanded and downright immoral tactics in their quest to receive payment on their accounts. While tenacity is certainly a good thing in the world of debt collection, there’s no need to resort to unsavory tactics in order to close a case. Any collection agency that resorts to harassing, bullying, and applying negative pressure to their debtors is simply proving their lack of expertise in this admittedly challenging field.

Most lenders would prefer to collect from their debtors without their collection representative resorting to these sorts of tactics for a couple reasons. The first of these reasons is moral in nature- most lenders don’t want to be associated with a collection agency that uses tactics they consider underhanded, manipulative or actively insulting.

Yet there is a very good reason why a collection firm shouldn’t resort to acting in such a negative manner- thug tactics rarely work. The more a collection agency attempts to “squeeze” or threaten their debtors, the more that debtor will take increasingly drastic measures to avoid their financial responsibilities. A hefty loan is distressing enough on its own for debtors. Once you add on the constant threats and acts of harassment utilized by some debt collectors you create a negative situation of truly overwhelming proportions.

Considering the fact bullying collection tactics are both distasteful and ineffective, it’s surprising so many collection agencies continue to utilize them. The reason why most agencies stubbornly persist with these tactics is simple- they don’t know any other method to try out. Most collection agencies simply don’t have the training, the experience, or the imagination necessary to figure out a more effective, and less distressing, mode of closing their cases.