From small businesses to enterprise organizations, companies often seek a partnership with a collection agency when past due accounts receivables begin to mount. Small businesses may have never conducted collections or found it was too time-consuming to pursue, and larger organizations may not have the technology to conduct debt collection efficiently. But at what point do these organizations seek to hire a collection agency? What are the signs to look for?
Here’s When It’s Time to Hire a Collection Agency
The obvious sign that it’s time to hire a collection agency is when you’re faced with clients that fail to pay. When a customer’s check bounces or when they fail to pay at all, hiring a skilled professional to recover what’s owed is a necessary part of doing business today.
#1 If your business is too small to devote a dedicated resource, it’s time to hire a collection agency. Small business owners are already struggling to handle all of the tasks needed to stay afloat. That’s when debt collection get pushed to the back of the to-do list. But most of these companies can barely stand the fiscal pressure from past due A/R. That makes them more vulnerable, so the need to hire a collection agency is high.
#2 For complicated accounts or clients that are tricky to collect from, a collection agency can be the third-party to handle past due debt. For example, if the client is a trusted vendor with a long relationship that you would like to maintain, it can be extremely difficult to collect on a past due account. A good collection agency is further removed from the business relationship between your client and your company. They are also highly experienced in maintaining a positive marketplace reputation for your company while still going after what is owed.
#3 Your dedicated collection team is falling behind. We know that the longer a debt accrues, the harder it is to collect. If a company sees that past due A/R is increasing, do not delay in exploring your options with a collection agency. Time is money in the collections field, so the longer you wait, the less you stand to recover.
#4 If the client disappears, it’s time to call for help. A collection agency has the tools and resources to track those missing-in-action clients. Skip tracing is a professional service offered by experienced collection agencies and will help track down elusive customers, making it more likely your debt is recovered.
#5 If your team is not confident they have the most up-to-date technology or if they feel they’ve not kept up to the latest changes in collection law, it’s time to seek help. Debt collection is one of the most heavily regulated fields in the U.S., so losing touch with regulatory changes is a risky move for any company. The technology is rapidly changing, too, and today, sophisticated algorithms and predictive analysis in new software have amped up the success of the professional collection agency. If you’re still conducting collections in-house, chances are you’re falling behind these innovations.
Choosing the Right Collection Agency
Business News Daily reports that there are more than 4,000 collection agency firms in the United States today. Finding the right agency is as simple as reaching out to industry leader TSI. TSI provides solutions for accounts receivable management and debt collection services for commercial enterprises. Click here for more information.