Collecting your past due debts: How to make sure you receive your money

February 17, 2012 by Blog

When it comes to running a business, the very first lesson most business professionals learn the hard way is that money is needed in order to make the business run.  Without money, there will be no way to pay for your employees, pay for your supplies, or even continue to pay for your business lease and business utilities.  If you regularly have clients or customers which do not pay for their services, you may find yourself struggling to keep the business running without that vital funding source.  In the event you find yourself constantly on the phone attempting to call your customers in order to collect their past due accounts, you may want to switch tactics towards a more proven method of debt collection.

Hiring a debt collection agency, such as a global international collection agency, can be the first step into successfully collecting your outstanding business accounts.  As a business professional, one needs to stay on top of their accounts payable and receivable functions in order to ensure the collection efforts are worthwhile.  It is a proven fact that the longer a debt remains outstanding, the harder it is to collect in the end.  For example, a debt which may only be 60 days late still has a chance of being recovered, as opposed to a debt which is 180+ days over due.  Knowing exactly what debts need to be collected will help a quality debt recovery agency work towards satisfying the past due debt.

Once you are ready to hire a debt collection agency, you may not know the first thing in order to get started.  One of the very first factors to consider is to ensure the specific agency is licensed in the states which your debtors are located.  Due to the very strict collection laws which vary from state to state, making sure you hire a collection agency which is legally able to collect within your state will help you greatly in the long run.

Another factor to consider when hiring a collection agency is cost.  Costs can vary greatly from agency to agency and understanding the fee structure for your specific company is vital.  Depending on the debt collection agency, some may not even charge you until the debt is recovered.  Some agencies offer flat fee arrangements, and some additionally charge a percentage of debts recovered.  Because of the variations of fee structures, understanding what your potential global international collection agency charges will help make the decision easier when hiring an agency.

As one can see from reading the information above, there are many factors to consider when deciding on a debt recovery agency to hire.  Above it all, the most important factor to remember is whenever attempting to run a successful business, money is the key to running any successful enterprise.  Anytime there are uncollected debts, you are putting your business in danger by not acting on collecting these debts.  Hiring a highly skilled, professional, and results driven debt recovery agency will allow you to focus on building your business to higher success rates while putting the control of debt recovery within a professional agency.

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Adding up the Documents needed for Successful Debt Collection

January 19, 2012 by Blog

Debt collection is probably not the first thing on your mind when you set out to build your business and deal with consumers.  This is a negative aspect to business; but one that must be faced nonetheless.  The sooner you address the fact that you may inevitably have a customer who forgets or purposefully attempts to skip out on money owed, the better prepared you will be to deal with the issue when it happens. This is true even though you will most likely use a debt collection agency when the time comes.  For instance, our reputable California collection agency can move far more quickly when you have taken the steps to maintain proper documentation of all credit extended during the life of your business.

Before you ever extend credit to a single customer, it pays to have drawn up those points that will be important should an account become past due.  For example, plan for additional charges that the customer will be held liable for. Typically this will involve late fees and added interest in order to compensate for the cash flow issues that arise when an account becomes delinquent.  Your specific state will have guidelines for the legal rate of interest that can be charged to a late paying customer, so adhere to these. Attempting to charge a higher interest rate than what the guidelines state is usually fruitless.  Should our California collection agency win a judgment, only the allowing interest will be awarded.

Other fees that you want to spell out in your credit terms are those costs associated with collecting the debt.  This could include debt collection fees such as court costs, attorney fees and any fees from our California collection agency.  All fees accrued in collecting a debt should be the responsibility of the consumer; but may only be awarded if you have adequately spelled them out in credit terms.  By documenting terms clearly, you better protect yourself and your business, while maximizing cash flow and facilitating an effective process of debt collection.

One of the most necessary pieces of documentation that is used in collecting past due debt is your credit application.  This provides the necessary information that will help you initially assess the risk in extending credit to a customer; but will also hold details that will enable your collection agency to more quickly and successfully collect debt.  To better chances even further, make it a practice to continually update information once you have extended credit to a customer.   People move and change phone numbers or employers.  To best track a bad debt, you must be able to track the borrower.

In addition to keeping credit applications up to date with the proper terms spelled out, you also want to maintain all statements, invoices, purchase orders, customer agreements, bills of lading, and personal guarantees as well as any other pertinent forms specific to your business.

Debt collection doesn’t always have to be a complex task.  Maintaining excellent documentation as a regular practice is the best way to help your collection agency reclaim the money that is owed to you.

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Debt Collection: Do You Need Help?

November 21, 2011 by Blog

There are certain guidelines for companies who extend credit to vendors or customers.

You may be aware of some of the most common.

  • Assess a client’s credit worthiness before extending any sort of credit by having them fill out a credit application.
  • Verify all information in a credit application.
  • Ensure every client understands and agrees to the terms of payment.
  • Monitor all accounts on a monthly basis.
  • Call clients right away if (when) account becomes delinquent.
  • Mark any file that is delinquent so all staff can immediately notice.
  • Be sure to mail out monthly statements marked “Thank you for your Payment”.

Now, we’re not saying that these guidelines are inadequate.  You must start somewhere.  However, these guidelines don’t state much about international debt collection, or anything about dealing with a professional debt collections agency.

International debt collection is becoming increasingly common due to the number of people who do business over the internet.  The wonderful World Wide Web opens doors to countless business opportunities; but also puts a business owner in the position of dealing with international customers.  If you think that marking the file or sending an invoice to a non-paying customer in another country is going to do the trick, you have another thing coming.  If your company may at any time deal with international debt collection, the best course of action is to find a debt collections agency that has expertise in this type of business from the very onset of doing business.

How do you know which debt collections agency is right for your international debt collections?  Here are a few things to look for:

  • Knowledge of international time zones and employees who work within those time zones.  Many companies work only within the time zones where they are located. With international customers, this does not work!
  • Foreign language abilities.  To collect debt from a customer in a foreign country, your debt collections agency should employ individuals with foreign language abilities.
  • Knowledge of collection requirements in foreign countries.  Laws change quite regularly.  You therefore need a debt collections agency that is up to date with the requirements in foreign countries in order to effectively collect debts.
  • Partnerships are essential to successful international debt collection.  The most successful debt collections agencies have partnerships in various foreign countries.

You may see clients in your office that you bill later.  You may front products to a wholesaler or retailer.  As such, you may fall into the trap of believing you’re not extending credit.  Make no mistake; if you invoice, you are extending credit.  The guidelines listed above may help you; but following them does not guarantee that all of your accounts receivable will stay up to date.  To successfully run your business and collect on invoices both foreign and domestic, your best bet is to partner with a professional collections agency with a strong track record of excellence and ethical behavior.

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California Debt Collection – Handle with Care

November 21, 2011 by Blog

Debt collection can be a difficult task for a company to handle in any way, shape or form.  There are plenty of day to day operations that need to be dealt with; debt collection being one of the most important fiscal tasks.  Due to the impact on a business, collection of debt should be handled by a professional who understands the most up-to-date rules and regulations of each individual state.  Each state has their own unique guidelines for dealing with debtors, and the adherence to such guidelines may make or break a case.

Extending credit to customers is a gamble that many businesses have no choice but to make.  We live in times when credit is necessary for larger purchases; and sometimes even small ones.  It may seem like a safe practice to regulate who you extend credit to; like only those with a higher credit score.  However, regardless of the circumstances present when credit is extended, it is possible that a payment may be missed.  People experience financial hardships that leave them to question which bills have priority over others.  Because credit issues can and do occur with unfortunate regularity, the business owner and managers are left to figure out the best ways to go about debt collection.

Dealing with California debt collection can be tricky and requires expert knowledge of the states regulations.  For instance, debtors in California are protected by both federal and state statutes.  Moreover, there are court decisions that actually create liability for the debt collector.  The state has a keen eye for debt collection practices that may be deemed abusive or unfair.  Debtors are prohibited from calling during certain times of day; able to call between the hours of 8am and 9pm.  This is not news.  However, debtors are also prohibited from calling at any inconvenient time or place; a regulation that might be easily misconstrued.

Companies that deal with debt collection every day understand the special restrictions surrounding California debt collection as well as the specific practice guidelines set forth by all other individual states.  Some companies that specialize in collecting debt on a commercial level also have departments assigned to the specific task of international debt collection.  The point here is that the job of a business owner and management personnel is to handle the day to day operations of a business; not spend valuable business building time seeking payments or judgments for payments due.

Dealing with debt collection in any state should not be an overly complex task that eats valuable time.  Sometimes there are simple solutions to recovering debt from customers; solutions that a professional debt collection agency knows how to get to.  There are several reasons why a customer may not repay their debt.  A professional agency understands this and has the expertise necessary to communicate to late- or non-paying customers the solutions that may work for them.  Through this understanding, proper communication, and an adherence to state guidelines, a company may find that they have far less debt collection issues.

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Debt Collection Success

October 19, 2011 by Andrea

Debt Collection Success

Not only are low rates important, but an equally important issue is what is your rate of success and your net collection. An extreme scenario to demonstrate this issue is to compare a collection agency that charges 10% contingency fees to a debt recovery service that charges 50% contingency fees.

If the 10% contingency fee collection agency has a much lower collection success rate than the 50% contingency fee collection agency, even though they charge less for the accounts they do collect, your net results will be better if you work with the collection agency charging you 50%.

This is stating the obvious, but it begs an important question, about the simultaneous need for both low contingency rates and high collection results. With this in mind, our main goal is to put as much money back into your hands as possible.

Ideally, you can find and work with a collection agency that offers both low contingency rates and high success rates. In addition, you need to find a debt recovery service that also provides excellent customer service.

Most companies work on an every-increasing thin line of margin. This margin seems to grow thinner by the day. It is especially difficult to accept the idea net collection when, even if the debtor recovery agency collects your money, you stand to lose a significant amount of money. Nevertheless, selecting an agency and comparing rates is not enough to make a determination, you have to seek out quality, even though it costs money.

We’re happy to report that with our collection agency you can enjoy the benefit of both high quality debt recovery services and excellent collection results at the lowest contingency rates available. This important combination will result in the highest net return for you as you work to mitigate your losses and recover important cash flow.

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Contingency Rates: No Collection, No Fee!

October 19, 2011 by Andrea

Contingency Rates:  No Collection, No Fee!

One of the first questions creditors usually ask us is how much we charge for our debt recovery services. This is a reasonable question and one we’re very happy to answer and discuss. Of course, everyone wants to know about
the collection process and how we will collect their money, but the most pressing issue from the start appears to be our debt recovery rates. There are hundreds of debt recovery agencies; however, very few offer the full services we do and even fewer offer low contingency rates.

Most collection agencies we compete against that offer our quality of services charge between 35-50%. For over 20 years we have offered low contingent rates starting at 15%. Of course, we have different rates for different types of accounts and scenarios, but our highest rate, our rate for litigation, represents the low end of where most other agencies’ rates begin. In other words, our highest rates are where other collection agencies’ rates start.

We originally established our debt recovery services rates based on the most important factor involved in collection, the age of the account. Our low contingency fee structure rewards creditors that identify problem accounts
and take action quickly by placing them with us while they are still relatively new. The reward is we offer a lower rate for these types of accounts. Our fee structure is based on this important concept of time. In other words, the more recent your account is, the less it will cost you if we collect it.

Everyone wants the best possible deal available. Why pay more the same thing, right? We’re proud of our low contingent rates and our fee structure. We encourage you to contact us to discuss your situation and see how our
rates might benefit you or your company.

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Why Should I Invest In Debt Collection?

November 17, 2011 by Andrea

Why Should I Invest In Debt Collection?

When a debtor fails to pay a creditor, the creditor is not only out the money they are owed, but they are also emotional about being taken advantage of. Invariably, when a creditor calls a collection agency regarding their debt recovery services, they want to vent their emotions and explore every option available to them to recover their money.

It is natural for a creditor to want to be made whole for the injustice they incurred; however, part of the difficulty for a collection agency is they have to be the ones to explain how debt recovery services and the law work. A creditor will listen intently as we explain the collection process, but ultimately they want to know whether it will cost them anything to recover the money they are owed. This scenario elicits one of the questions we are most commonly asked.

Creditors want to know if our debt recovery services fees can be added to the amount of the debt. If so, the creditor would obviously be able to recoup 100% of the money they are rightfully owed. Unfortunately, this is not how our legal system works. In a fair world this would be the case, but in ours it doesn’t work that way. Our debt recovery fees / our contingency fees are taken out of the amount collected, not added to the total amount. Sadly, the creditor will not be made whole in the end, they will only receive a majority of the money they’re owed.

Once faced with this unfortunate reality and information, there is an immediate follow up question, which involves terms, stated on invoices, credit applications or contracts. It turns out most of these documents include some form of stipulation which calls for the debtor to pay all collection fees and attorney’s fees. Based on this stipulation, especially
on signed contracts, it would appear the debtor would be forced to pay our debt recovery fees. The problem is the Courts simply don’t support these stipulations for collection fees or contingent attorney fees. Instead, in cases where we file suit and we are awarded judgments, the courts will award what they consider to be reasonable attorney’s fees. Unfortunately, in determining what “reasonable” means the courts do not ask how much the debt recovery services from the collection agency are costing the creditor and add that amount to the total amount owed by the debtor. Instead, they usually award a random or scaled amount in addition to the principal amount, costs and interest.

When creditors hire a collection agency for their debt recovery services, even though they were wronged by the debtor, they need to move beyond this unfortunate reality and consider how to best mitigate their losses. The good
news is we offer some of the lowest contingent rates available in our industry. Our low contingent rates hopefully soften some of the financial and emotional stress involved in collecting the money these creditors are owed.

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