Why you might need a collection Agency?
As an account ages, the chances of collecting decreases dramatically. It’s expensive to carry accounts that you will not be able to collect using your resources. It sometimes becomes a better use of your company’s time and resources to concentrate on other aspects of your business.
First, you should have a good credit manager. This will reduce the chances of having bad debt. With the right approch, you can minimize your bad debt. As your business grows, you may then have to place the accounts with an outside collection agency. Using a collection agency can be profitable for your business and help you grow.
Not Every company needs a collection Agency.
In some cases, referring too many accounts to a collection agency before trying to collect yourself ends up being too costly. Make sure you understand that you will not collect the full amount.
You also have to look at the reputation of the collection agency. It could end up hurting your reputation if that collection agency uses tactics that are questionable. You might be taken to court for not making sure that you did your homework. If you send an account to a collection agency where you have failed to contact initially or you have shipped the wrong or defective product, will cost you dearly.
Watch out for scams.
Working With a Collection Agency
First step would be to check their reputation.
Once you decide on a collection agency, use their forms to list accounts or their format to upload accounts electronically. Give as much information as possible-accurate information about the account will improve collections.
Collections masters can help you manage your accounts receivable and choose the right collections method. We are in the cash flow management business.