When businesses don’t get paid or paid in full by consumers, they can either forget the debt and count it as a loss or attempt to collect on the debt. Most businesses choose to go this second route; however, instead of trying to track down and collect on the debt themselves, they’ll typically hire a commercial debt collection agency to do the work for them. However, before hiring a commercial debt agency, it is important for businesses to understand how they work and how, exactly, to select the best one.
First of all, be aware that not all commercial debt collection agencies offer the same services. All have the end goal of tracking down and collecting on unpaid debt, but the way each agency will go about it will differ. The better agencies really go the extra mile to collect on debt and may provide services such as:
l Relocating individuals who have moved away and still owe money
l Account forwarding to other agencies if necessary
l Consultations and other helpful debt collection services
In addition to considering the services offered, businesses that are attempting to collect on debts through commercial credit agencies are encouraged to consider the size of the agency. One that is too-small may not be able to handle the collection needs of a larger business. Both the agency and the consumer should be clear on how much the agency can handle and whether or not it can adequately meet the needs of each particular business.
Business clients are encouraged to ONLY do business with commercial debt collection agencies that are fully licensed to work with clients and to do business in their state. Licensing regulates the agency and ensures that it operates legally and fairly, so not being licensed should certainly be reason to turn down a particular debt collection agency’s services. However, licensing is not required in all states, so business clients should ensure they know the laws as they relate to their particular area.
In addition to looking for a licensed agency, if applicable, borrowers should also look for an agency that is bonded and insured and that is a member of related trade organizations.
After carefully choosing a debt collection agency, business clients should keep careful track of the success that their agency has with collecting on debts. Many agencies will offer an online way of tracking success. If these reports show that the agency is having decent success, then great! If success rates are not good, however, then it may be wise to start the process over again and find another collection agency to assist with collections.
Collecting on bad debt is rarely easy, but, with the right commercial collection agency, it can certainly be made a whole lot easier.