One of the primary challenges when managing a company is recovering money owed. Regrettably, as the whole world has sunk deeper into an exceptionally tough economy, the vicious circle of being owed increasingly more money and therefore struggle to pay your own obligations can be a critical circumstance for many. Using the services of business collection agencies you are able to significantly enhance the profits of your business and concentrate your own attention on other aspects of the company. Business collection agencies can certainly help to keep your business on the right track.

The way in which business collection agencies work is a representation of your own company process, they're your representatives in these situations, and thus it is important that you decide on a respectable company which has a good reputation together with an honest way of debt recovery.

It is important to make a decision when to call in business collection agencies to recoup your debts. The earlier you act, generally, the easier it is to recover your debt. The following is one idea of a schedule that you can adopt.

*Bills sent out having a 'must be settled by' date clearly marked. Psychologically, this is demonstrated to work better than, for example, saying that the amount must be paid within 30 days. An exact date is more likely to be adhered to.

*A friendly telephone call within 2 or 3 days after the 'pay by' date to remind concerning the unpaid bill. Ask when you may expect payment.

*A reminder letter might then be sent, this should still be friendly and professional, and ask when you can expect the settlement to be made.

In the event that all these attempts bear no results, then the time is right to think about using the services of business collection agencies. The more time that the debt is outstanding, the more difficult it will be to recover, so do not delay too long.

You ought to definitely call in the expertise of business collection agencies when:

*Your client begins to make ungrounded grievances and make excuses for non payment.

*Your client denies owing the money, even though you have invoices to prove it.

*The client starts to neglect your repeated requests, and does not respond to your attempts to secure payment plans.

*The customer changes address and/or phone number, and does not give you any forwarding details.

Business collection agencies usually charge a percentage of the payments which they recoup for you, as their fees. Oftentimes they'll charge a lower percentage for bad debts that are, for instance, 1 month overdue instead of issues which have been continuing for months or perhaps a year, because these debts will normally be a lot less difficult to recover.

It is a good idea to weigh the commission payments against the average success rate of the company. If you instruct business collection agencies with $10,000 of debt, for instance, who charge 25% and have a recovery rate of 70%, your total collections would be $5,250. If, nevertheless, you chose business collection agencies who cost only 10% commission but has an average success rate of about 40%, you will only recover $3,600. This is well worth considering before choosing which business collection agencies will work best for your company. Cheaper isn't always better, and as in many other walks of life, you get what you pay for!

If your debt amounts are smaller, then some businesses, instead of getting a percentage charges you a flat price for letters and telephone calls made for you.