Some Important Reasons Commercial Collection Consultants Speed Up Cash Flow To Your Business
Posted by: Guest Author / Category: CreditIf your job description involves collections at all, you need to know how commercial collection consultants can help you. If you have a small business, work for a large company, or even are part of a government concern that does collections like a utility or a tax office, at some point you may have considered hiring a collection agency. Commercial collection consultants are even better.
Commercial collection consultants do perform collection functions, but their methods of getting your money back have a wider scope than the traditional tactics of persistent phone calls and threats of lawsuits. They use methods like mock audits, private investigations and maximization of debt milestones in order to handle tough collection challenges.
How do commercial collections consultants use audits to recover money for you? This technique is widely used in cases where outright collection efforts such as calling, sending repeat notices, and threatening the debtor with lawsuits will backfire. This is often the case with clients who are good longstanding patrons falling into a bit of an economic hardship.
If you want to preserve the opportunity for future business, your commercial collection consultant may, rather than making demand for payment, contact the debtor under the auspices that they have been hired to do an audit. They mention the past due amount in passing. Usually the idea of an audit is enough to make a debtor pay.
But what about clients that lean more towards deadbeat than good? This is where using a private investigator is a wise idea that will help you get money back. First, a private investigator is skilled at finding people who you may not be able to contact. When they do skip traces they find new phone numbers and new addresses for people who may have been obscuring their location from your collection department. This puts a serious crimp in the debtor’s plans to avoid you.
A private investigator can also do a search for assets on the debtor. This will let you know whether or not the debtor actually has any capacity to pay or not. If you have to hire an attorney to collection a judgment, you want to be damn sure that there is actually something to collect against.
In addition, if the debtor also has dozens of outstanding judgments against him or her or has recently filed bankruptcy, the private investigator can tell you that as well. It is important to be fully armed with knowledge when it comes to collections and a good commercial collection consultant will help you do that.
Finally, a commercial collection consultant will keep you apprised of the window of opportunity for best collecting on debts. The amount of money you are likely to collect drops sharply the longer the debt is outstanding. At 90 days, you should get about 80% of your money back, but at 180 days, the amount drops to below 70%. After a year it drops sharply to 45%. A good commercial collection consultant will keep this in mind and concentrate their efforts in a timely manner so that you are likely to get the largest return on your open receivables.
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Tags: accounting, accounts receivable, business, commercial collection agencies, Credit, debt collection, Finance, financial