Benefits of Using Services of a Debt Collection Agency

Every company, small, medium or big that is in the financial sector always has ‘receivable income’ in the form of dues owed by customers. If you look at an Annual Accounts Statement there is likely to be a column denoting ‘bad debts’ or pending dues. Some of these amounts may be recovered, some not at all, or through long-winding legal procedures that can stretch through many years. The international accounting firm Pricewaterhouse Coopers (PwC) estimated that in the mid 2000s, external collection agencies recovered debts to the tune of $30 billion annually. This is a whopping amount!

In such cases, companies may either deal with receivables through internal mechanisms or outsource the collection of such amounts owed, to external collection agencies. These are third-party commercial collection agencies contracted by the company to use the skills and resources that the agency has in recovering the amounts due. Such an agency is called a Debt Collection Agency. These agencies are governed by the regulations of the Fair Trade Debt Collection Practices Act and so they have the knowledge and the expertise of the do’s and don’ts associated with the collection of debts.

There are many benefits accruing from using a Debt Collection Agency, among these are:

• The internal accounts department of a company is usually responsible for collecting amounts due to the company; however, ‘ageing receivables’ as long-standing debts are referred to require a lot of time, skill and dedicated effort which may require intensive training. Since delays can cost the company extensively, a third-party service or commercial collection agency is fine-tuned to handle this job exclusively and therefore able to recover money that might otherwise end up not being recovered at all.

• Sales teams in companies that are owed amounts by clients are sometimes not paid their commissions or incentives if monies are outstanding from customers. This forces sales people to spend a great deal of time working to recover the money rather than doing actual sales calls or sales generation for future revenues. This greatly impacts the revenues of a business.

• Acquiring new customers is an expensive task but retaining existing customers is a key factor in the success and longevity of every business. Playing the role of ‘bad cop’ in debt recovery from existing customers is not a function that most companies look forward to as it can have adverse impacts with them. Using a third-party service to send notices for debt recovery usually spurs the person or company owing the money to get into action without seriously affecting relationship with the company.

• In business to business circles, the unwritten policy is to prolong bill payments for as long as possible to allow better cash flows. In some cases, unless a collection agency intervenes to demand payment, checks or outstanding amounts are not released against invoices.

• By paying a collection agency or agent a fixed salary for collecting debts no matter what the amount owed, companies save a lot of money which otherwise would have been spent on paying salaries and additional time and effort in training them to collect dues effectively. Most companies only pay collection agencies when the money is recovered.

Especially, for companies in the financial sector such as banks, extending lines of credit to existing and new customers depends a great deal on keeping ‘ageing receivables’ to the minimum. Only by fuelling growth, can banks succeed in achieving their target deposits and revenues. Therefore by using a commercial collection agency, the bank can expect to recover amounts early, retain customer relationships and credit worthiness as well as ensure that their financial books keep a healthy status.

The Fast and Effective Tips For Reducing Credit Card Debt

It is vital that you should try to pay your credit card debt within stipulated period of time and you should try to improve your financial situation by all possible means. Otherwise, if you have unrestrained credit card debt, then there is every possibility that it will haunt you from time to time. However, it is vital that you should take the help of a proficient lawyer so that you can handle this type of issue in the best possible way. Even if you are sued by your creditor, the lawyer can help you to handle it in the best possible manner. This article will highlight on a few important tips that you should consider in order to reduce credit card debt as quickly as possible.

Before you take the initiative to resolve this kind of issue, it is important that you should be able to know where exactly you stand. You will not be able to handle it if you do not know the exact amount of debt that you need to pay.

The next step is to try to talk to your credit card organization about your financial situation without any kind of delay. Once you explain your financial scenario, the next step that you should follow is to find out if you can get any sort of help from the particular organization in this matter. If you do so, there is every possibility that your credit card agency will reduce the rate of interest for a particular period of time or it can even waive the current late fee amount in order to provide you with ample scope to clear off this kind of debt.

Once you manage to reduce it in the best possible way, it is advisable that you should track down all kinds of costs as much as you can. All you have to do is to write down different types of expenses such as insurance, phone, mortgage and so on. If you track down these expenses, there is every possibility that you will be able to understand the exact way your debt is accumulated in due course of time.

Your next step is to find out the appropriate strategy that you should follow to pay your credit card debt. For example, you can invest a low amount of money to pay credit card debt along with high interest rates and at the same time, you should try to curtail all the other expenses as much as you can.

You should check out if there is anything that you wish to clear up in order to get out of this type of problem. For example, if you have purchased an expensive car or you have bought an air conditioned machine, it is advisable that you should give it a thought if you at all have the ability to maintain such expensive items for a long period of time. If you get rid of this expensive item, there is possibility that this type of debt will be reduced and you do not have to face financial hardship at any point of time.

Debt Collections And Getting People To Pay Up

When one needs to chase overdue payments from their debtors, there are certain skills and techniques that would help you achieve positive results. If you use a little psychology to influence the behavior of people, you would be surprised at how efficiently you are able to recover the money from the people.

Management of customer relationships

You must handle the discussion of unpaid invoices with your customers carefully since it is a sensitive subject. When you hire the services of a third party debt collector, you may be worried about the quality of the services they deliver. When you keep in house debt collection personnel, you can manage your customer relationships and also drive future sales.

Document everything

Take careful notes about everything that you discussed with your customer regarding the debts including customer comments in case you face a future debt dispute. Input everything into your computer so that you would also have a soft copy of the discussions with you. Continue to add any details to the file so that you have an updated file with you.

Be pleasant

The tone in which you speak to your customers can impact how successful your conversation would be. If you begin the conversation with a confrontational or an unfriendly tone, then the customer might not respond positively to you. Once you have confirmed that you are speaking to the right person about the debts, ask if you can do anything to assist them. Ask whether they can be helped in some other way by you. If you act like you care, then you could get the work done. You may also be able to prevent the persons from becoming defensive. However, you can remain detached from the entire situation. Your final aim is to collect the debts from as many people as possible.

Keep communicating

It is always important to keep the communications going even if the debtor cannot pay right away. He may be able to pay in the future and by talking to the person or the debtor would help you find out why he is delayed in his payments. You may be able to find out sooner as to why he is deferring his payments. Especially when the debt becomes an older one, the harder it becomes to collect it. Debt collections are common, especially in difficult times. When you use these debt collection techniques, you would be successful in debt collection.