In running a business that offers credit to people, there is no way you can avoid having some bad debtors. With the current tough economic situations, some people must get behind as far as payment is concerned. Most of these cases are just small mishap, because they later recover and settle their debts. However, some people fail to pay completely. Even if you try to request them to pay, they do not even answer your phone calls. In such a situation, the only way to recover the debt would be by contracting national collection service.
Today, there are law firms whose main job is to collect past due accounts. Although you are likely to succeed by opting for these firms, they are often very expensive, meaning that even if you get to recover the money, it will just be a fraction of the whole amount. In fact, these firms charge more than 50%. This means you have to look for other alternatives. The law firms ought to be used only in cases where there is no other option at all.
There are professional collections agencies that also specialize in helping businesses recover money that is owed to them. They are also quite successful in recovering these monies. However, what they charge is different. To get the one that charges fairly, it is incumbent upon you to do a research and arrive at the best one.
The formula used in calculating the charge by most agencies is to take a percentage of what they manage to recover. The percentage is usually from 25-33%. This also does vary and is dependent on the business location. Apart from the percentage charge, you may also be required to pay volume fees. This is where you will be asked to pay some money, and is due to the number of accounts that are being recovered. If you have more accounts, you will pay less volume fees.
On the other hand, younger agencies charge fees on every account. This means you will pay a flat amount of money on each account. The disadvantage with the method is that a flat amount is paid, and so the collector does not necessarily have the incentive to work hard and collect cash.
The agency does not have the urge to try harder and recover your money. This is because you have already paid them. It is not a very good way to go.
When looking for the right agency, ask them if they have a lawyer as one of their staff. This is important in issuing out legal notices to the debtors. There are times when these debtors will not answer phone calls. In such cases, the collector can send notices which give them a bit of a muscle.
Debts are normal part of life. There is no way one can run a business of lending out money to people. However, some people want to be cheeky and avoid paying the debt. The best way to recover this money will be by hiring the national collection service. This then frees you to run your business, as the work is taken over by the collectors.
Today, there are law firms whose main job is to collect past due accounts. Although you are likely to succeed by opting for these firms, they are often very expensive, meaning that even if you get to recover the money, it will just be a fraction of the whole amount. In fact, these firms charge more than 50%. This means you have to look for other alternatives. The law firms ought to be used only in cases where there is no other option at all.
There are professional collections agencies that also specialize in helping businesses recover money that is owed to them. They are also quite successful in recovering these monies. However, what they charge is different. To get the one that charges fairly, it is incumbent upon you to do a research and arrive at the best one.
The formula used in calculating the charge by most agencies is to take a percentage of what they manage to recover. The percentage is usually from 25-33%. This also does vary and is dependent on the business location. Apart from the percentage charge, you may also be required to pay volume fees. This is where you will be asked to pay some money, and is due to the number of accounts that are being recovered. If you have more accounts, you will pay less volume fees.
On the other hand, younger agencies charge fees on every account. This means you will pay a flat amount of money on each account. The disadvantage with the method is that a flat amount is paid, and so the collector does not necessarily have the incentive to work hard and collect cash.
The agency does not have the urge to try harder and recover your money. This is because you have already paid them. It is not a very good way to go.
When looking for the right agency, ask them if they have a lawyer as one of their staff. This is important in issuing out legal notices to the debtors. There are times when these debtors will not answer phone calls. In such cases, the collector can send notices which give them a bit of a muscle.
Debts are normal part of life. There is no way one can run a business of lending out money to people. However, some people want to be cheeky and avoid paying the debt. The best way to recover this money will be by hiring the national collection service. This then frees you to run your business, as the work is taken over by the collectors.
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