What is Commercial Collections?
Commercial collections is the process of collecting past due debts from businesses rather than from individuals. When a business has an overdue account with another business, a B2B debt collection company can provide assistance in getting the debt paid so that it doesn’t have to be written off.
Commercial Collections in New York
Finding the right commercial collections agency can be tricky. Debt collection in general tends to be a sensitive subject, for both debt holder and debtor, so finding a company that can collect for you without risking relations is ideal.
In our experience as a commercial debt collector, this means approaching each and every collection case with a high degree of efficiency and professional tact. Navigating the different rules and regulations for collections across state lines presents a series of unique challenges as well, so it’s important to work with a firm that has a record of successful collections in multiple states.
Before choosing a commercial collections company in New York, it’s important to understand the company’s reputation and commitment to collections industry best practices. Choosing a reputable and experienced New York commercial collections company is an important decision for any business and performing thorough due diligence before entering into a partnership will ensure the best possible outcome. Remember, any collections agency you work with will essentially be representing your company.
What Types of Businesses Can Benefit From Commercial Collections Assistance?
Both small and large businesses can benefit from working with a commercial collections firm. Commercial collections firms can help all businesses by collecting vital revenue, as well as by freeing up employees to work on other aspects of the business. Really, any business that has clients with past due accounts or that struggles to collect large balances from customers could potentially benefit from working with a commercial collection agency.
While some people think of collections as having a negative connotation, it’s really just like outsourcing work to any other experienced professional. Most businesses wouldn’t hesitate to hire a plumber to fix a water leak, or a graphic designer to create a logo. Commercial collection companies are another type of specialist that can help businesses succeed.
Cost of New York Commercial Collections
The first question that most businesses have when it comes to hiring a New York commercial collections company is: How much is this going to cost? The good news is, most commercial collections firms operate on a contingency plan. That means that the collections company doesn’t collect any service fees from a company until they collect money on the debts that were assigned to them. Although every firm is different, usually the collections company keeps a percentage of the amount collected on past due accounts before forwarding the rest to the business. A contingency plan both incentivizes the collection firm to aggressively pursue payment and means the business isn’t out even more money while awaiting payment on past due accounts.
The actual contingency fee, or any other fees, vary from firm to firm. It can also change based on other factors associated with the debts to be collected, including the amount of debt, the type of debt, how long the accounts have been past due, and what type of collections work is needed to collect the debt.
Commercial Collections Process
The actual commercial collections process will vary depending on a variety of factors, including the type of debt being collected, the industry, and the type of collections work needed to complete the debt recovery process. In some cases, this means conducting on-site investigations, such as meeting with the debtor in person, inspecting real estate at the debtor’s location, and more. Other collections processes could include issuing demand letters, credit and collections analysis, commercial credit reports, and more.
Although filing a lawsuit to get payment is usually an option, in most cases, it’s best to keep that as a last resort, as lawsuits are time-consuming and expensive. An experienced New York collections firm will have a variety of methods at their disposal to effectively collect as many debts as possible, before considering a court filing.
When to Consider Hiring a New York Commercial Collections Firm
For the most part, businesses have the highest success rate in collecting payments due within 60 days of the due date. After that, the effectiveness of internal collections dips way down. If a business has a large backlog of accounts that are more than 60 days past due, it might be time to consider hiring a New York commercial collections firm. The longer a past due account goes uncollected, the less likely it is that the account will ever be paid.
Hiring a commercial collections firm to bring in revenue from those extremely delinquent accounts will both free up employee time to work on accounts that are more likely to be internally collectible, as well as bring in revenue from accounts that have previously been uncollectible through in-house efforts.
Alexander, Miller & Associates, LLC is a commercial collections firm that specializes in fast track commercial collections and on-site investigations for businesses of all sizes. Headquartered in Houston, Texas, the firm provides commercial collections services to clients across the nation, including commercial collections clients in New York. Contact Alexander, Miller & Associates, LLC today to help with your company’s past due accounts.