Cash flow is the lifeblood of any business. This is true of all business models, including business to business companies. You still need to get paid, on time, regardless of whether your customers are individuals or multi-conglomerate companies.
In fact, your overdue accounts tend to pack more of a punch in the B2B world. One contract could have millions hanging in the balance.
A business to business debt collection agency is there to help in case delinquent customers are threatening to turn off your cash flow. But don’t entrust this delicate task to just any agency. Check out this list to ensure you’re choosing the best agency for your needs.
Here’s what the top commercial collection agencies do — and what they don’t!
They DO Treat Your Debtors with Compassion
Every business has a code of ethics that informs how they approach overdue accounts. The top commercial collections agencies build theirs around debt recovery laws and trade organization best practices.
What this code ends up looking like is different for every commercial collection agency.
The debt recovery experts at Summit A*R have what’s called a P.H.D in collections. Standing for “preserve human dignity,” it means they treat each debtor with integrity and respect. To see how this influences their commercial collection services, check out Summitcollects.com for more information.
As you search for agencies, remember that whatever company you choose will be an extension of your company. Choose one with a code of ethics that matches your own; it’s the best way to ensure your debt recovery tactics preserve your business’ reputation.
The DO Have a Perfect BBB Rating
Reading up on an agency’s code of ethics on their website is a great starting point, but you’ll want to get a second opinion. A third-party look at their services will be the true test of how they treat your customers and vendors.
Go online to see how they fare on websites like the Better Business Bureau and TrustPilot, paying close attention to reviews left by customers and debtors alike. You know you’ve hit the jackpot when even the person who owed money leaves the agency a glowing review.
They DO Provide Transparent, Affordable Fees
The top commercial collections agencies value transparency when it comes to their rates and fees. They understand how frustrating it is to be in your position, with your cash flow in your debtors’ hands. They don’t want to complicate matters by sending you a complicated contract full of hidden fees.
Look for a commercial collection agency that takes their payment only if and when they successfully recover your debt. Upfront payments and mandatory minimums raise red flags about their billing process, so you’ll want to avoid these when you can.
They DO Collect Stubborn Debt
The top commercial collections agencies are masters of negotiation. In most cases, they can convince your debtors it’s time to make good on their payments with charm alone.
But fair-weather debt recovery isn’t your only concern. It’s crucial you find a company that can collect when things get tough.
Some of the top agencies will have a set of tools that they can pull out for the most stubborn cases.
- Credit Reporting — Unlike in-house collections departments, a national debt collection agency has the power to share delinquencies onto business credit reports.
- Skip Tracing — When a customer skips town, a skip tracing team can track them down with the help of a private investigator.
- Litigation — If you need to take a vendor to court, the top agencies will ensure it’s a financially viable option before connecting you with expert attorneys.
They DON’T Harass Your Debtors
Perhaps the biggest stereotype of collection agencies is that of the tenacious phone call. Determined agents call all day and night, hounding debtors about their overdue accounts at dinner and at work. They’ll stop at nothing to get what they need.
But there’s a problem with this. It not only goes against a strong code of ethics, but it also violates the Fair Debt Collection Practices Act (FDCPA).
The FDCPA is a federal law that regulates the way debt collection agencies may treat debtors, and it prohibits unfair collection tactics. One of them is how often they can call people. According to the FDCPA, they can’t call someone before 8 a.m. or after 9 p.m. They also must stop calling if your debtor has an attorney representing them.
They DON’T Use Threats or Aggressive Language
Another negative stereotype of the industry involves the screaming collection agent hurling threats and obscenities at the debtor. Shady businesses fall back on these abusive tactics in the belief that intimidation will get people opening their wallets faster.
The top debt collection agencies will never represent your business in such a way.
The FDCPA prohibits any language that may be considered harassment, including profanity or threats. Any agency that uses these techniques are breaking the law and should be avoided.
They DON’T Misrepresent
Pretending to be someone else (like a lawyer, for example) may be another form of intimidation that’s against the law. While there may be accounts that require legal action, a genuine attorney will take on this role — not the debt recovery specialist. They also can’t threaten to do things that they can’t, including arresting someone who has overdue accounts.
No reputable commercial debt agency will ever lie about these things in order to get your money back; if they’re good at their jobs, they won’t have to resort to these deceptions.
With experienced negotiators on their team, the best agencies know how to reach a deal without falling back on these illegal practices. And again, they have tools such as credit reporting and skip tracing to convince even the most stubborn accounts.
Every company will deal with at least one delinquent account over its lifetime, but this doesn’t mean you should take bad debt as the necessary cost of keeping your doors open. You deserve to get paid for your products or services, whatever they may be.
Consider this list a rubric for when you search for an agency. It sets reasonable expectations from your business to business debt collection agency by outlining what they will and won’t do. Partner with an agency that follows suit to have a reliable team on your side.