Tech in the Collections Industry


The debt collection industry functions much differently than it used to. A lot of this has to do with the introduction of automation and self-service technology. Over the course of just a few years, these advancements have made it possible to reduce the amount of time spent on the tasks that were once monotonous and labor-intensive. In some cases, those tasks are able to be eliminated altogether all while improving the likelihood of receiving the payment that you’re owed. 

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Is Your Internal Collection Process Not Working For You?


If you are in the service business and are often in the situation of having outstanding receivables there may be struggles getting your money back from time to time. Sometimes, the money you lent to a borrower is returned later than expected, creating a negative cash flow which can be a stressful situation. When other businesses owe you money, your team should have a clear and defined process to follow for reaching out and trying to collect. But if they have to wait days for a response, and sometimes wait all that time without getting a response, the time can stack up to work against you.

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When a Customer Files for Bankruptcy


It’s happened: you’ve received a letter saying that a customer of yours has filed for bankruptcy to resolve their debt problems. While this can be a frustrating situation, don’t waste your time worrying about what may or may not happen. Depending on your customer’s bankruptcy details, acting quickly could result in repayment for a portion or even all the unpaid debt you are owed. The debt collection process in cases of bankruptcy are not as strenuous as many companies seem to think, especially if you know what your options are. This article will explain what happens when someone you’re trying to collect from files for bankruptcy and how to move through the debt collection process.

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3 Ways to Create Urgency in Collections


As a business, it can be frustrating watching days, weeks, or even months pass by while you wait for reimbursement for your valuable time, products or services. Afterall, the saying “time is money” holds true when it comes to unpaid debts. According to figures from Inside Account Receivables Management, by the time receivables are 90 days overdue, they could be worth only 20% of their original value. 

So, how do you create a sense of urgency for your debtors to take prompt action as opposed to remaining passive? Rather than expend unnecessary time, energy, and resources pursuing overdue invoices, allow us at Alexander, Miller & Associates to help capture the attention of your debtors by using the following powerful techniques:

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Top 3 Tips For SMB Owners Trying To Collect a Debt


Small and medium businesses often have a difficult relationship with debt collection. They want to be paid for their services or products but what they don’t want is to come on too strong and risk losing a client. However, this stems from the very idea that asking people for your money back is a bad thing. The first thing that needs to be done is mindset-building.

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Debt Collection vs Receivables Management: What’s the Difference?


Running your business can be difficult. You’ve got projects, employees, accounts. A hundred spinning plates, and they’re all tied to your income and your company’s success now and in the future.

Maybe you run your business because you’re really passionate about what you do, or maybe you found something you’re really good at and enjoy supporting yourself with hard won skills and time. No matter why you do what you do, at the end of the day you have to get paid for all that work. Even the most enthusiastic entrepreneurs have to draft an invoice to afford their overhead.

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Watching The Trends


With any business, it’s important to follow the trends happening across the world and its various markets. From social media trends to changes in domestic or international markets, keeping an eye on the flow of money and interest around the world is a crucial factor in maintaining a solid bottom line. The same is true for your clients, and while you’re probably already aware of everything that directly impacts your own business, it’s prudent to consider the perspective your clients are facing at the same time.

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How to Pay Off Debt in Collections


If you find yourself or your business with debts that have gone to collections, it can seem a little overwhelming. We’ll break down the process of paying off the debt in collections so that you can get them handled quickly and efficiently. To start, it’s important to realize that if you have debt that is in collections, it has been due for quite some time. Not only does this affect the business or person you owe, but it also most likely has an impact on your credit score. It’s important to get this resolved as soon as you can.

Your first step is to make sure that the debt is yours. As obvious as this may sound, you will want to validate that the debt the collector is calling about is in relation to you as an individual or business. If it is not debt that you recognize, be sure to request proof from the collector before making any payments.

Negotiating With The Collector

The first step to paying off the debt in collections is to answer the phone when the collector calls or get in contact with them through a written request. They have been commissioned through the person or business that you owe to obtain the outlaying debt. The first step is to negotiate with the collector. There is something called a settlement payment, which works by paying off the amount so that the account can be deleted off your credit report in return. You will need to send in a written request to the collector for this. This is the best-case scenario, as it lessens the impact on your credit report and also allows room for negotiation. You can also do this over the phone, so long as you are careful with your wording. Most likely, you will be able to work with the collector to negotiate a lower payoff.

Getting it in Writing

Whether you submit a written request or call to negotiate, be sure to get all of the agreements in writing. You can ask the collector to give you access to a letter with all of the payment information via mail or fax, and make sure you do this before you pay anything. This is especially important if you choose to go the settlement route.

Having to Pay in Full

If the above scenarios don’t work for your specific case and collector, you may have to pay in full. Again, you should try to negotiate to pay the amount in full and have it removed from your credit report. Be sure to keep the general rule of having it all in writing before you make the payment.

Other Options

There are other ways to pay off your debt in collections, although they may not be your first choice. One option is to at least make sure that the payment is labeled as “Paid in full.” This is the best case if the collector will not remove it from your credit report, and this should also be in writing. If this is simply not possible, you can request that the account is labeled as “Paid. Settled.” If you do not want to do any of these steps, you can always pay in full and pay off the debt.

Whatever the choice is that you make, paying off the debt is the end-goal of the collector’s process.

 

What is Commercial Debt Collection?


If your business is looking to outsource debt collection, commercial debt collection is a good option to consider. Outsourcing debt collection can take worry off your plate and get your business the money it is owed in a way that is safe and proficient. Commercial debt collection works to collect money that is owed between businesses for various types of accounts or production. For example, if a large business orders product from a small business, and they do not deliver, they may turn to commercial debt collection. Commercial debt collection can work for businesses of all sizes and may be a good option for your business to receive its debt pay-offs without the hassle of doing the work.

What types of debt do they collect?

The types of businesses that commercial debt collectors work for vary across the board. Some examples are colleges and institutions, major companies, sales companies, and construction companies. The companies can be of all sizes and provide a wide range of services. They work to collect outstanding debts on accounts between businesses. The reason for debt collection is to ensure that funds that were promised or agreed upon by a contract are delivered. Businesses often outsource to commercial debt collectors when their own attempts at collecting the debts on their outstanding accounts between contractors and other businesses have proven unsuccessful.  

How do they collect?

Commercial debt collectors operate through first determining who the business owner is or who is in charge of paying bills. It’s essential that the right party is reached to ensure pay-off can happen in a timely manner and that the topic of finances is discussed with the right person. Once the correct person has been identified, the commercial debt collectors are then able to make calls at regular intervals. These calls are used to determine which payment method will work for both parties and the timeline they will make payments on. Having a commercial debt collector be the one to contact owners of outstanding accounts can be used to ensure that your business remains profitable and receives the money it deserves.

What differentiates them from consumer debt collection?

When determining the difference between consumer and commercial debt collection, it’s all in the name. Consumer debt collectors work for a business to collect debts that are owed by an individual to the business. Consumer debt collectors are subject to FDCPA governance (the Fair Debt Collection Practices Act), whereas commercial debt collectors are not. This doesn’t mean that commercial debt collectors are free from all rules, though. Commercial debt collectors are not able to use tactics that are aggressive, threatening, or illegal.

Are they regulated?

Regulations also differ based on the state that a commercial debt collector is in. Some states have a requirement for commercial debt collectors to be licensed and bonded, and there are also associations that work to ensure fair practices.

If your business is looking into outsourcing your debt collection services, it’s time to look into which accounts have outstanding debts. If your primary debt issue is individuals and consumers, a consumer debt collection is best. However, if you have relations with businesses where accounts are unsettled, outsourcing these debts to a commercial debt collector can assist you by taking over the process.