Oct
29
In tough economic times when the market is struggling, the financial burden results in more accounts being transferred to commercial collection agencies to recover monies owed. Commercial collections more often deal with larger balances than personal debt collections and thus commercial companies owing have more at stake in regards to their credit standing for future business if they fail to meet their responsibilities. And though restrictions aren’t as tight for commercial collectors, it is important to remain professional at all times.
In principle, commercial debtors should appear as they do in their day to day business operations, with the courtesy and professionalism that earns them clients and retains new ones, but they can be more demeaning in regards to company finances than their personal collection counterparts.
One advantage of operating a commercial collection agency over a personal agency is that many businesses delay collection accounts due to their priority level –day to day operations that produce revenue for the company is first and foremost-, and not due to a lack of the ability to pay it off. By advising the accounts payable representative of the importance of maintaining an impeccable credit rating for the company, the faster the commercial collector can convince the accounts payable representative to address and resolve the issue. Maintaining a pristine credit rating, the company can better assure that potential clients will be more confident in doing business with them.
Commercial collectors have a responsibility to act professional, but firm in their demand for repayment on a delinquent account. Experience in collections teaches one to assume that any contact with the debtor will be the only contact. Resolving accounts in arrears on the initial contact, on as many accounts as possible, is the primary goal of any collector. While client collectors get paid a salary no matter how much debt is recovered, the third party commercial collection agencies are often only paid when they collect.
In commercial collections, the client that refers an account to a third party agency has no intention of losing existing business and sometimes one collection notice is enough to urge the debtor to resolving the account. Unfortunately, not all commercial companies are so quick to pay off accounts. Some company policies dictate that they hold onto their payables until strict demands are made directly from commercial collectors or from correspondence.
Oct
28
Commercial Collections Agencies Can Help You Recover Your Money Now
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Do you run a business? Do you sometimes have trouble getting other businesses to pay you or pay you on time? Is too much of your day spent trying to collect payment on overdue bills? If you answered yes to these questions, you might want to consider using a commercial collections agency to get more of your money paid faster.
Such an agency is experienced in commercial collections. By using one, you can devote more of your time to concentrating on the day-to-day tasks of running your business, not trying to collect money on past due bills. You can reduce your bad debt.
Make certain you choose the right commercial collections agency, however. Not all commercial collectors have the same amount of experience. Make certain you choose the right agency. Find out if it has experience in the type of work it will do for you, if it will be able to collect the amount of money you are seeking, and if it can give references.
Do you have confidence the commercial collections agency can deal professionally with your customers? If someone from the agency would have one bad conversation with them, it could ruin your reputation and even involve legal issues.
Does the commercial collections agency you are considering using know the law on such issues? Does the agency have enough resources to use skip tracing, one of the methods used, to find those who are avoiding you? There are local laws to consider, and does the company know them well enough to avoid breaking any rules? If you would hire a company that would break a law, that could be worse than having the debt.
How many methods of debt collection does the company you are considering use? Will it use only the methods you approve?
A commercial collections agency can help a large or a small business. Not all businesses pay their debt on time. Some do not pay at all. If you get tired of filling your balance sheets with such terms as andquot, bad debt, or other receivables, you might one to find a reliable one. You will find your debts will be paid much sooner. You will have more revenue, and your salespeople will receive their full commissions, not spending some of their time working as debt collectors. You will also be to retain current customers and seek additional ones.
Jun
9
Research shows that country’s economic growth has slowed to its weakest pace since 2001, the last time the nation experienced a recession. In an article published in the Economic Times, April 2007- 2008 saw a 49% increase in nationwide business bankruptcy filings, by far the year’s biggest gain. Even worse, jobs have been lost for the fourth month in a row, with a total of 260,000 having been cut this year. And all of this occurs even as a federal law makes it harder for people to erase debt!
While the entire nation has been targeted, South Florida has been hit particularly hard. An article published in the Sun-Sentinel found that from January- April, the U.S. Bankruptcy Court’s Southern District of Florida, which represents nine counties, received 5,579 total business and personal bankruptcy petitions. The same period in 2007 saw 3,227 petitions; a whopping 73% year-to-year increase! The court found that there were 73% more business and personal bankruptcies filed in April 2008 compared with a year ago.
In March, 15 Palm Beach County businesses, 25 Broward County businesses, and 32 Miami-Dade County businesses filed for bankruptcy. Andrew Cagnetta, owner of Fort Lauderdale’s Transworld Business Brokers, says that South Florida’s economic crisis is due to the “triple whammy effect: gas prices, banks being uncooperative and the real estate market not fueling sales.”
Now, many companies are permanently closing and filing for bankruptcy protection. This includes those with multiple South Florida locations, such as Linens ‘N Thing and American Home Mortgage. A large number of South Florida-based companies, including two builders, Levitt and Sons and Tousa Inc., have also sought bankruptcy protection. One company’s problems can affect others; a builders’ bankruptcy causes contractors, door/window companies, and flooring businesses to declare bankruptcy, as well. And family-owned businesses aren’t safe, as many suffer when their tenants leave or can’t pay the rent.
It’s unlikely we’ll see much good news in the near term as more bankruptcies and foreclosures are certainly to be expected in a recessionary period. “The biggest question is how long the cycle is going to last,” says Mike Jones, president of Palm Beach County’s Economic Council. “This is really serious. It’s not going to be a short cycle. It’s not a quick recovery,” said Paul Singerman, the bankruptcy lawyer for Levitt and Sons of Fort Lauderdale and co-counsel for Hollywood-based Tousa. He says that for every client filing for bankruptcy, 10 more avoid bankruptcy by doing “workouts”; this includes selling businesses, refinancing debt, or taking on new partners with money.