Debt Collection Can Be A Key To Remaining Profitable

In the current economy it is a common practice for bigger corporations to have their own on site "collection agency" that is often referred to as a "Debt Recovery Unit." This department within the corporate structure is responsible for handling all debt collections when required and ensuring that everything possible is done to collect all bad debts. Unfortunately, this has become more and more necessary, even within the business to business environment because more businesses are struggling to pay their debts.

While some big businesses can afford to have their own debt collectors on permanent staff, many small to medium businesses cannot afford this luxury. At the same time these businesses still have debts that must be collected and they need somewhere to go for help. To provide this service, there are commercial somekeyword. These agencies typically deal only in business to business debt, when the debt exceeds a specified dollar amount.


In recent years even larger companies outsource their debt collections because it is often more cost effective than keeping a staff of debt collectors on the payroll. As a business owner, you spend your days handling the day to day operations of your business. Any time that you have to spend tracking down delinquent customers takes away from the time you have to devote to keeping your business operating in the black. Before you say that it is too expensive to hire a collection agency to handle your debt collections, you need to look at the big picture.

The best place to start is by looking at the amount of money you have in outstanding debt. You work hard to keep your business up and running and you pay all of your bills on time. You have a right to expect the same from your customers. When your customers don't pay their bills, it makes it harder for you to pay yours. It takes a lot of time to track down the right people to contact regarding payment and to communicate when them about the payment. When you convert all this time into dollars and cents, the cost of collecting these debts goes up significantly.

You are going to have to pay a fee to any collection agency you hire to collect these bad debts. In most cases collection agencies work on a contingency basis and charge only a percentage of the debt collected. Compare this fee to the dollars spent making endless phone calls, sending duplicate invoices, postage and the costs of certified mail, etc. It is highly likely that you are spending a lot more money than you realize trying to run your own in-house collection agency.

In-house somekeyword can successfully collect from debtors. However, when it becomes obvious that collecting is not going to happen, then it is time to turn these accounts over to a commercial collection agency. Professional debt collectors are experts in their field. Therefore, their chances of successfully collecting are typically higher than in-house debt collectors. In addition, when debtors are contacted by a professional debt collector, they see this as a strong message that the creditor is serious about collecting the money that is owed.

Most commercial collection agencies recommend that companies turn over accounts when they have aged to 90 days. Studies have shown that when a debt is older than 90 days, it becomes more difficult to collect. The older the debt becomes the less likely it is that the debt will be fully recoverable. If your company is planning to turn over very old debt, it might be a good idea to look for an agency that has its own legal staff, including an in house debt collection attorney. By looking for a full-service agency, if an account requires legal action to collect, it can all be handled with a single agency and a single fee.

At the somekeyword we are a full-service commercial collection agency and we have been successfully handling commercial debt collections for 21 years. Our staff is highly educated and experienced, each with at least 10 years of commercial collection experience. We tailor our debt collection strategy to fit the needs of each individual case, and when you hire our agency, we have a simple policy, if we do not successfully collect your bad debts, there are no fees. We will do what it takes to collect your money, within the auspices of the law and collect it fast.