“The cost of collection is too high”

Certainly no business owner enjoys having to send an account for collection. It is frustrating to provide a product or service, not get paid, and then have to pay someone to recover the money owed to you.

We debt collectors get that. Really. We do.

We also understand that the REAL costs of collection go beyond the rate we charge.

Carefully selecting the collection agency that will best help you reach your goals is the first step. Make sure whatever compensation plan you choose gives you the best bang for your buck. A small fee to send a letter may sound like a good idea, but it seldom works, especially if you have attempted in-house collection.

The REAL cost of collection includes not only your lost revenue but the time you have to spend chasing your money. Many small businesses hold on to files way too long because they do not want to “give up part of their money”. In truth, however, holding on to files too long is risky. People move, incur even more debt or declare bankruptcy. 

It makes no sense to do nothing to recoup your money because of a rate a collection agency will charge. What DOES make sense is to minimize your cost of collection.  Here are some ways you can do that:

1. Firm up your customer contracts. In many states you can recover all or part of the cost of collection if your signed contract allows for it.

2. Make certain that your contract with your collection agency is all-inclusive, and that there are not hidden fees for research or other activities.

3. Don’t wait so long to send your accounts to a collection agency. Rates get higher the longer the debt is owed.

Remember, if someone owes you money, chances are they owe someone else as well. It is the cost of doing NOTHING that hurts the most.

Need help trying to hire a collection agency? Download our free e-book, “How to Hire a Collection Agency” today!