Past-due accounts are every business owner’s nightmare. And sadly, the problem gets worse as time goes by. The older an account, the less chances of collecting on it. Moreover, using the resources you have at your disposal to pursue delinquent accounts can be costly. This is why more and more companies are turning to the smarter, more economical way to collect outstanding debt: outsourcing a debt collection agency.
If an account is past due 90 to 120 days, it is time to hire a debt collection agency. Outsourcing a debt collection agency is a great way to enhance your business and help it grow. Here is a quick look at the benefits of outsourcing a debt collection agency to bring in the money.
No collection, no fee: Most collection agencies do not charge the client unless the debt is collected. This means that if the agency fails to retrieve your money, you won’t have to pay a penny for their services. Other financial benefits to hiring a collection agency may include special discounted rates for large accounts over $10,000.
Affordable accounts receivable management services: Due to the weak economy, many businesses cannot afford to keep on their pay roll full-time accounts receivable management. If you need to reduce the size of your in-house staff, the right collection agency can do the work you need. Outsourcing a collection agency as your accounts receivable department can save you thousands of dollars in salary expenses, including vacation, benefits and taxes.
Automatic attorney forwarding services: If the debtor refuses to pay the debt or continues to ignore collection efforts, the collection agency will automatically forward the claim to their attorney in the debtor’s area. This type of approach is extremely effective because the attorney is right in the debtor’s “backyard,” according to leading California collection agency Prestige Services, Inc.