The thought of chasing customers to collect the money you’re owed probably isn’t the first thought on your mind when operating a business. At Point Law, we specialize in commercial, government, and healthcare debt collections and we’re here to provide solutions to collect your unpaid invoices. Not getting paid for services performed or products sold can severely affect your cash flow. Whether this is a one-time issue or an ongoing occurrence, you need to be aware of how to handle these situations and when it’s time to place your uncollected debt with our professional debt collection agency and law firm.
Point Law is Here to Collect the Account in Full
When business owners are trying to decipher between the correct time to place an account with a debt collector versus holding on to it because they think they’ll recover the funds themselves, they need to ask themselves the following: how old is the account and is the debtor going to pay us? The sooner you send the debt to a Columbus debt collection agency / law firm the higher the chance of recovery is.
We’re here to uncover the issues, work the accounts appropriately, and get the accounts collected in full. More information on the process we use to collect can be found here.
Below are several examples of common excuses used when trying to collect a debt:
- My boss is out of town, but he will be back next week. We’ll be sure to make the payment upon his return.
- It is my busiest time of the year; I’ll be sure to get you paid when I can get to it.
- We put the check in the mail.
- We don’t have the money to pay.
Our collection agency and debt recovery law firm has seen the runaround occur too often when these debtors are trying to avoid payment. If they have not stated that they are going to dispute it, this is another way of saying they are not going to pay it.
Why Does My Business Need a Debt Collection Agency / Law Firm?
It is easy to understand the hesitation from the business owner’s perspective about not contacting a debt collection agency and law firm. They don’t want to give away a percentage of the payment. If there is a $10,000 invoice, our company could charge up to 25% and the mindset of the business owner is, “I don’t want $7,500, I want the entire $10,000.” Another thought may be, “I’ve collected a debt that was 3+ months old before. Why would I place with TDR now?”
The answer is simple: Sure, you may collect some old debts from time to time but the odds are heavily against you once an invoice goes unpaid for more than 60 days. Placing accounts with us is supposed to help correct this issue of writing off a lot of bad debt at the end of the year. Additional information on why you should use a debt collection agency and law firm can be found here.
If you are the business owner you need to ask yourself the questions below. You must realize that for each day you are not getting paid for your services performed or products sold, the chances of collecting that money decreases rapidly:
- Less than 30 days (within the normal Net 30) = 90%-95%
- 30-59 days = 70%-90%
- 60-89 days = 60%-80%
- 90-120 days (rapid decline) = 15%-50%
Types of Debtor Accounts
It is typical in the collections industry for existing, potential, and even new clients to call in around April and May with lists of bad debt and other write-offs made in the past couple of months. Unfortunately, some claims placed within collection agencies are nearly impossible to liquidate. If you’re looking to place claims for collection but are unsure of what to place, this should give you some insight as to what accounts our debt collection agency / law firm is prepared to handle.
Oftentimes businesses will place bankruptcy claims but it is nearly impossible to collect on these. Though it makes sense from the business side why you would want to place this type of write-off, from a collection agency and debt recovery law firm perspective there is little to be done when a debtor has no assets. There’s no way to collect money that just isn’t there. As a debt collection agency / law firm, we don’t want to provide false hope to our clients when we likely won’t be able to collect payment from their debtors.
On the other hand, disputes and avoidance accounts are two types of claims that need to be collected on. Disputes are most commonly associated with service-industry businesses such as plumbing and others where someone is hired to fix a problem. Typically, these are a low-worry type of claim, as it’s generally just a way for debtors to avoid paying for the service. If they’re bankrupt, that’s a different case, but if it’s simply just a dispute so you should send the account to us.
Avoidance accounts are what we call accounts whose main point of contact stops answering the phone and dodges any questions or promises prompt payment but doesn’t deliver. In this case, the debtor likely has financial trouble, and it is up to us as collectors to get to the bottom of it and collect payment as quickly as possible.
When to Contact a Debt Collection Agency and Law Firm
- Have you received the runaround?
- Have they been in debt with us before?
- Are they not returning calls?
- Is it 15 days past the original terms of the invoice?
If your business sends out a Net 30 invoice, on the 31st day, you should follow up to get a status on the payment. By the 35th day, if they still haven’t given a concrete answer on when the payment is arriving and how it will be paid, you should start talking to us.
An issue our agency and law firm has seen, which has a drastic effect on the liquidity rate is placing one large annual batch of claims for collections. As described above, if claims are past the 120-day delinquent mark, we likely will not be recovering as much as we can at the 30-60 day mark.
Contact Our Columbus Debt Collection Agency and Law Firm Today
We here at Point Law will review your current methods of collecting debt and we will discuss ways in which you can improve it. Our company will implement an in-house process that is very simple to follow so your business can start seeing an increase in paid debts. You can learn more about Point Law and our process here. Contact our Columbus Debt Collection Agency / Law Firm today to start getting the money that is owed to you.