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Choose Wisely When It Comes to Commercial Collection Agencies

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A commercial collection agency is a company that collects outstanding and past-due debts just like many other collection agencies, except that a commercial collections agency specializes in collecting debts from businesses, for businesses. 

Even though businesses need to have their past-due accounts collected and reconciled as soon as possible, businesses should always be careful when choosing an agency to deal with. There are a number of formalities that come into play in a relationship with a commercial collection business.

An unfortunate truth is that there are commercial collection agencies that don't exhibit the extra dose of professionalism that is needed in an industry where trust means everything. There are agencies who will hit you with unreasonable fees, fees that will surface in the middle of a contract (that weren’t discussed ahead of time), and companies who don’t use proper internal auditing, as well as other issues that could haunt you.

Not All Commercial Collection Agencies Are the Same

Take your time when choosing a commercial collection agency because there are a lot of them - but they’re not all necessarily experts in what is a very specialized industry. Shopping around for the best commercial collections agency is a worthwhile strategy that will not only help you save money during the actual debt collection, but will also help save on administrative costs.

If your business needs help collecting business debts on a regular basis, your goal should be working towards developing a long-term relationship with a commercial collection agency. Your focus should be with the intention of getting the best commercial collection agency that can provide your business with a worry-free debt collection service for a long time.

Avoid any agency that offers you commissions far below the accepted Commercial Law League rates, or that makes promises that seem outrageous. Compare sources and ask for references from other business owners or managers in your industry. Word of mouth is a great way to figure out who to work with.

Once The Ball Is In the Collectors' Hands, Let Them Run With It

Once you’ve begun a relationship with a commercial collection agency and you have turned a past due account over for collection, make sure you provide the agency with what it needs to do its job. Some of what you should provide can include:

  • A statement of all charges (from your past due client/account).
  • Copies of any POs, invoices, proofs of delivery and contracts.
  • Photocopies of customers' checks for any payments (including partial payments)
  • Any correspondence regarding the account in question, which can include any correspondence related to shipping or sale of physical items, if yours is a retail type.
  • If your business has any personal or corporate guarantees in writing that you include as part of doing business, include copies of them as well.

Unless the matter involves your business needing to return merchandise or issue a credit memo to your customer, don’t get involved in the process between the collection agency and the customer. Be aware though: Sometimes the customer will contact you to try to cut a deal so they won't have to deal with the collection agency. 

Even if they make threats, stand your ground; be professional and polite but make sure you refer them to the collection agency and try to eliminate as much conversation as possible. If this does happen, do advise the collection agency and let your own legal counsel know about the situation.