Before You Hire a Collection Agency

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hire a collection agency

Collection agencies can be a great way to continue pursuing overdue invoice payments while leaving you to focus on running your business. However, they should only be used as a last resort after you have tried your own debt collection strategies to no avail.

Before you hire a collection agency, wat doet een incassobureau sure they are licensed and bonded. In addition, find out if they specialize in your industry or work with a certain size of business. Lastly, find out how much they charge to collect each invoice. It’s important to keep in mind that most debt collectors operate on a contingency fee basis. This means that they only get paid if they successfully recover the debt on your behalf.

The ABCs of Debt Recovery: Why You Should Hire a Collection Agency

You should also find out whether or not they are covered by insurance in case they become overly aggressive with a customer and violate state or federal laws. You may want to ask the debt collection agency to provide you with references from past clients that have worked with them in the past.

In most cases, a collection agency will contact the customer via phone or email to inform them of the outstanding balance they owe your business. They may also attempt to negotiate a payment plan or settlement with the customer. If the customer’s check bounces or they change their address, collection agencies have special resources to track them down through skip tracing services.

As a small business, your cash flow is critical to the survival of your company. When customers don’t pay their invoices on time, it can slow down your production and halt your business growth.

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