Running a business has many challenges but perhaps one of the most difficult is getting people to pay what they owe. Tracking down consumers takes time and without debt collection experience and knowledge of the law, you could create an even bigger problem. No matter the size, or what kind of business you’re in, you have to be prepared for what you’re going to do when consumers don’t pay. One past-due payment here and there might not sound like a big deal, but if you allow your slow-paying accounts to snowball out of control, your business could really suffer. In today’s post from Partners Financial Service, we want to discuss some of the telltale signs that you need help from a third-party collection agency. Keep reading, and if any of these situations apply to you, give us a call to discuss how we may be able to help.
Sign #1: You Don’t Have the Staff
According to the Small Business Administration, there were just under 31 million small businesses operating in the United States in 2019. And, while you don’t have to be a small business to have problems with debt-collection, it’s usually small businesses that have the biggest challenge when it comes to debt recovery. A limited budget and headcount make it hard for small businesses to hire dedicated staff to work on debt collection. By hiring a third-party collection agency, your employees can focus on core business activities instead of spending all day trying to track people down.
Sign#2: You’re Not Familiar With Debt Collection Laws
There are many laws that govern debt collection practices,and if your team isn’t familiar with the Fair Debt Collection Practices Act, it’s time to reach out to a professional. The purpose of the Fair Debt Collection Practices Act is to protect consumers against unfair methods of debt pursuit including using deceptive or misleading information and harassment to collect money. Interacting with consumers in ways that are prohibited is not only a poor way of doing business, but it could also get you in trouble.
Debt collection is a highly regulated industry with ever-changing laws that can vary from state to state. It’s not good enough to just become familiar with the Fair Debt Collection Practices Act, you have to have a working knowledge of the specific laws in each state. Save time and reduce your risk by hiring a professional and experienced third-party debt collector.
Sign #3: Your List of Slow-Paying Customers is Growing
Debt recovery is an ongoing task for every business. It’s not something that you can do for a few hours each week and expect to stay on top of past-due accounts. If you haven’t had an experienced, dedicated staff handling debt recovery in the past, chances are your list of slow- or non-paying customers continues to grow. And, the longer accounts are delinquent, the less money you’re likely to recover. If your team is swamped with day-to-day business activities and doesn’t have the time to stay on top of past-due accounts, that’s a clear sign that you need the help of a third-party collection agency.
Sign #4: You’re Having Trouble Locating Some Consumers
If you’re spending more and more time trying to track down consumers who can’t be located, it’s time to hire a professional. Many times when people owe you money and they don’t want or can’t afford to pay you, they may avoid your calls or even move and change their phone number. It can be very difficult to reach these consumers unless you have professional tools like skip tracing to locate the whereabouts of those who are avoiding payment.
How To Find a Good Third-Party Debt Collection Agency
Improving your past-due accounts receivable numbers can be a challenge, but it’s not impossible. With the right partner, you can get more of the money you’re owed in less time while freeing up employees to work on other business-critical tasks.
A third-party collection agency can offer tools, technology, and expertise that your business may not have. All of these resources are critical for ensuring you’ll get the highest rate of recovery possible. Remember, the more days that pass, the less likely you are to receive the full amount of what you’re owed.
If you’re looking for a reputable collection agency that will maximize recovery efforts and positively represent your company, you have to do your homework. Here are a few of the things you should look for in your search for the right agency:
- Licensed in the state they are doing business
- Professional and customer-focused
- Experience in your industry
- Ability to do skip tracing
- Classified as a data furnisher for credit reporting
- Multiple methods for accepting payments
- Robust security measures
If you’re losing money because of non-paying consumers, it’s critical that you take action as soon as possible. Keeping debt recovery functions in-house may seem like a good choice in the beginning, but without the proper methods and know-how, you could be leaving a lot of money on the table. If you’re looking for a reputable and experienced company to work with, contact Partners Financial Service. Our mission is to provide our clients and consumers with ethical and effective collections using current technology, industry-proven methods, and a highly-qualified team. Learn more about what a dedicated third-party collection agency can do for you. Give us a call to get started today.