Should You Hire A Com­mer­cial Col­lec­tion Agency?

By Dean Kaplan

A com­mer­cial col­lec­tion agency deals with col­lect­ing a debt incurred by one busi­ness from goods sold or leased, ser­vices ren­dered or monies loaned for use by another busi­ness. This is in con­trast to a retail col­lec­tion agency which col­lects debt owed to a busi­ness by indi­vid­ual consumers.

If your busi­ness has a sig­nif­i­cant num­ber of long-past-due invoices, and your own employ­ees are not suc­cess­fully col­lect­ing pay­ment on these invoices, it might be time to hire a com­mer­cial col­lec­tion agency. As with any ven­dor hir­ing process, you should care­fully eval­u­ate all agency can­di­dates. Talk­ing to other credit pro­fes­sion­als within your indus­try is a good idea, as they can share their agency expe­ri­ences with you. Some agen­cies spe­cial­ize in a par­tic­u­lar indus­try, and may be well versed in get­ting pos­i­tive results within that indus­try. The bot­tom line is to do your home work. If you hire a local agency, be sure to check ref­er­ences as well as request finan­cial information.

Once you have made your agency hir­ing choice, begin to turn over your past due accounts for col­lec­tion. To expe­dite the col­lec­tion process, be sure to turn over all rel­e­vant account infor­ma­tion includ­ing: copies of pur­chase orders, invoices, proof of deliv­ery, con­tracts, copies of customer’s checks for any pay­ments made, all cor­re­spon­dence sent or received on the out­stand­ing items along with any claims of short­ages, non-conforming goods, break­age, or returns, and copies of any per­sonal or cor­po­rate guar­an­tees or secu­rity agreements.

The more back up infor­ma­tion you can pro­vide your agency, the bet­ter the chances of a suc­cess­ful col­lec­tion. In addi­tion, if ulti­mately a law suit is filed, you will need to pro­vide all of this infor­ma­tion any­way, so you are ahead of the game if you end up going down the legal road.

Once you have turned an account over to your agency, let the agency do its job. If they require assis­tance from your com­pany in the form of fur­ther infor­ma­tion, they will con­tact you. Once they have what they need from you, they will be most effi­cient if left to do what they do best. Rep­utable agen­cies will pro­vide reg­u­lar sum­mary reports to clients, typ­i­cally monthly, and more detailed reports when any­thing sub­stan­tial has occurred.

A com­mer­cial col­lec­tion agency receives it com­pen­sa­tion in the form of a com­mis­sion. This is usu­ally cal­cu­lated as a per­cent­age of what­ever amount is col­lected. The com­mis­sion should be nego­ti­ated before any work is com­pleted, and will vary from agency to agency. It may be a slid­ing scale, with the per­cent­age of the total col­lec­tion going down as the amount increases. Do your research ahead of time. Be sus­pi­cious if a per­cent­age is extremely low or if a kick­back is offered or other out­landish promises are made about recovery.

The Kaplan Group is a com­mer­cial col­lec­tion agency with a solid rep­u­ta­tion for suc­cess­ful debt col­lec­tions within a vast array of indus­tries. While we are based in Cal­i­for­nia, we col­lect from busi­nesses located through­out the United States. We serve both domes­tic and inter­na­tional clients. We take a very per­sonal approach to debt col­lec­tions, and our staff is trained to be pro­fes­sional and car­ing with our clients. Once the account is turned over to us, our staff thor­oughly researches the claim before any con­tact is made. Once the col­lec­tion process has begun, con­sis­tent follow-up enables our team to suc­ceed where oth­ers fail. State of the art soft­ware allows us to track the col­lec­tion process from start to fin­ish. Our effi­ciency and suc­cess rate are two of the things our clients love most about our ser­vices. Please con­tact The Kaplan Group to dis­cuss how we can help solve all your col­lec­tion dilemmas.

The Kaplan Group is a bou­tique col­lec­tion agency spe­cial­iz­ing in large (over $10,000) debt col­lec­tions due from busi­nesses. Founded in 1991, the com­pany has a stel­lar rep­u­ta­tion (A+ rat­ing with the Bet­ter Busi­ness Bureau) and is rec­og­nized as one of the lead­ing col­lec­tion agen­cies for results on large and com­plex mat­ters.