The Benefits of Commercial Collection Consultants To Your Business
Jan 28, 2010 accounting
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If you are in charge of any kind of collections efforts, whether for a small company, a large business or a governmental department, you may be wondering what commercial collection consultants are. Most people are familiar with the term collection agency but they may not know how commercial collection consultants differ. Following is an explanation of the difference and what you can expect from a commercial collection consultant.
Commercial collection consultant may sound like a fancy name for a collection agency, but people that use this term will be familiar with the most advanced collection techniques. These include conducting audits, using the services of private investigators and keeping their collections efforts within the time frame that has shown to be successful.
The audit is a method invented by commercial collection consultants, and it’s proven to be very effective in getting money back, especially when you need to collect from good clients who you don’t want to upset with standard collection techniques like repetitive calls and invoicing. If one of your best clients is suddenly having trouble paying, calling in a commercial collection consultant to do an “audit” can often solve the problem.
Instead of demanding payment, the collection consultant calls the debtor and informs them that you’ve hired them to audit the debtor’s receivables. They claim that this process has been done, and that they’ve noticed there’s a past due amount owed to you on the account. Often just the word “audit” is enough to get a good client to pay.
But what about clients that lean more towards deadbeat than good? This is where using a private investigator is a wise idea that will help you get money back. First, a private investigator is skilled at finding people who you may not be able to contact. When they do skip traces they find new phone numbers and new addresses for people who may have been obscuring their location from your collection department. This puts a serious crimp in the debtor’s plans to avoid you.
These private investigators will also check for assets belonging to the debtor in order to find out if he or she really has any means with which to pay you back. There is no point in paying for an attorney to pursue a judgment if the debtor has no assets or has left the country. This is all information you need to know in order to decide how much money and effort to put towards collections.
A private investigator can also tell you whether or not the debtor already has judgments against his or her assets, or if they’ve declared bankruptcy. Any talented commercial collection consultant will recognize that these are important things to know when you decide how far to pursue collections.
The last thing a commercial collection consultant can do for your business is to keep an eye on the law of diminishing returns. After 90 days, statistically you lose about 20% of your likely recover. At 180 days, this number rises to more than 30%, and after a year it goes up as high as 55%. Commercial collection consultants who have your best interests in mind will do their best to recover this money in a timely manner. A good commercial collection consultant will keep this in mind and concentrate their efforts in a timely manner so that you are likely to get the largest return on your open receivables.
David P. Montana has been a leading industry expert, business consultant and published published author in collection agency services for over three decades. He provides additional valuable tips and resources on commercial collection consultants and commercial collection agencies.
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Tags: accounting, accounts receivable, business, commercial collection agencies, debt collection, finance, financial
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