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.