How To Hire A Collection Agency: Turning Your Accounts Receivable Into Cash
by Takara Alexis
Since the start of the recession, businesses have had to a deal with reduced cash flow. This problem becomes even more critical when you are owed money and your debtors refuse to pay. In this situation it may be best for you to contact a debt collection agency in order to make sure that your company can remain profitable for years to come.
The first step is a classic: open up the yellow pages and search for a collection agency that is close to you. Each state has different rules for collecting debt, so it is best to go with somebody who's knowledgeable of the rules of your area. The agency could be called a variety of different things: debt collection agency, credit collection agency, bill collection agency, or a debt recovery agency. They all do the same thing, so you shouldn't worry about the name.
Once you have a list of potential debt collection agencies, do a little bit of online legwork in order to flesh it out. Most companies have a website nowadays, so you can go here to learn about rates as well as their areas of expertise.
The next step is a bit more complicated, but so is collecting bad dept. You should ask friends and local businesses to see if they have worked with any debt collection agencies and if they have any suggestions or horror stories they can share with you. Accounts receivable is one of the most important parts of any business, so you should make sure that you're working with a reputable company.
Now you should have a list of your top debt collection agencies that you should organize a face-to-face meeting with in order to make sure that these are the type of people that you want to work with. You should make sure that you have worked out what percentage of the bad debt the collection agency will take as their fee, what sort of tactics the debt agency will employ, and that they have experience in debt collection.
Once you have done this, go back to focusing on what makes your business great!
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