If you run a business and offer credit to your customers, you'll eventually have to deal with customers not paying their bills. When this happens, you can lose money, but that is a normal part of business that most companies expect occasionally. The good news is that you can hire another company to collect your debts for you. Here are three things to know if you are considering hiring a company for collection services:
1. When to Hire a Collection Company
The first thing to consider is when to hire a collection company to handle your collections. You consider your current collection efforts and ability to collect past-due accounts. For example, you could examine your data and realize that after a bill is 60 days old, you have trouble collecting it. Therefore, you could decide to send all your accounts to a collection company after they hit the 60-day mark. Other companies might wait until the accounts are 90 or 120-days past due. Examine your company's billing history to decide what criteria a past-due invoice should meet before you pass it on to the collection company.
2. The Benefits of Outsourcing the Debt Collection Process
As a business owner, hiring a company to collect your debts for you is beneficial because you will not have to spend time or energy trying to collect the debts. The collection company will do this for you.
Also, collection companies know how to effectively collect money, as this is what they do for a living. This means that you will have a better chance of collecting at least some of the money owed to you when a collection company pursues your past-due invoices for you.
3. How the Collection Process Works
When you hire a company to collect your past-due invoices for you, there are several ways it might work. It depends on the collection company. Some collection companies will purchase the debts from you for a set price based on the total remaining debt listed on the invoices. Other companies do not purchase the debts, but they charge a fee each time they collect money. Compare the differences between companies that work in your area to learn more about how your available options for debt collection work.
If you have any questions about a company's collection fees, the collection process, or how debt purchasing works, contact a commercial collection company, like Leib Solutions, today.
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