Many small business owners are too busy to pursue late accounts receivable on their own. When debtors fail to pay, they may hire a professional collection agency to take the burden off their shoulders. Collection agencies charge a fee to collect debts, but they also save time and help companies avoid potential legal action.
How long does collection process take?
However, the quality of the agency you choose affects how much your company gets back. To maximize your success, select a firm that specializes in your industry and that can tailor its approach to the specific types of debt you have. For example, some agencies specialize in chasing down medical and credit card debts, while others focus on commercial and real estate loans.
Most collection agencies are based on a contingency fee structure, which means that you only pay when they collect money on your behalf. Their rates range from 25 to 50 percent of the debt they recover. The rate depends on the type of debt and how difficult it will be to collect. Older debts and those with missing contact information are usually more expensive to pursue than newer accounts that have reliable information. More info : breyta.nl
Some collections firms offer extra services, such as credit reporting and skip tracing (the process of finding hard-to-reach debtors). They also may have different approaches to handling difficult or angry debtors. However, before you sign up for any of these additional services, make sure the collection agency is clear about how it will handle your debtors and that the terms are consistent with your state laws.