Collecting Debt In Mexico: 5 Things to Consider

Ever since NAFTA entered into force in January of 1994, Mexico has become one of the largest trade partners of the United States (US). As such, and because of its close proximity, commercial collection agencies are receiving more and more debt recovery cases from Mexico

Ever since NAFTA entered into force in January of 1994, Mexico has become one of the largest trade partners of the United States (US). As such, and because of its close proximity, commercial collection agencies are receiving more and more debt recovery cases from Mexico

Most people see collecting debt in Mexico as a complicated and near impossible process. Though not impossible, as with all international debt recovery efforts, it’s important to understand the laws and procedures of Mexico when attempting to collect on a debt. Every country has their own set of rules and regulations when it comes to international debt collection making it difficult for someone outside of a Commercial Collection Agency to handle the debt recovery.

Unlike in the US, collection costs and interest are not standard. Though they are enforceable, most debtors in Mexico will use those as bargaining chips to negotiate a more favorable settlement. Also, the process of communicating with customers regarding the collection of accounts receivables (Also known as “dunning”) is not standardized making it difficult to communicate with your debtor. Your best option, in this case, is to send a notarized formal letter via a commercial collection agency.

Below are 5 things we believe need to be evaluated and considered before preceding with collecting debt in Mexico:

How old is the debt?
Before beginning your debt recovery efforts, it’s important to take note of the age of the outstanding invoice. As with all debt recovery efforts, the age of the debt is very important. Staying on top of your debt recovery efforts, especially when collecting debt in Mexico, is essential. Our client case histories show us, outstanding invoices older than 1 year prove very difficult to collect against.

Is your debt consumer or commercial?
Another important consideration before attempting to collect debt in Mexico is the relationship of the debtor. When it comes to collecting on consumer (personal) debts internationally, the response rate is generally very low and therefore less likely to be retrieved. Commercial/Business accounts on the other hand, or more likely to be responsive resulting in a full or partial payment of the outstanding debt.

What is the size of the debt?
When considering your collection efforts, it’s important to weigh the costs associated with collecting the outstanding debt; and by cost, we͛re not just referring to the out of pocket expense (i.e., time, energy, etc.). The time, energy and out of pocket expenses associated with your debt recovery efforts need to be tallied before you proceed. It might behoove you to ignore the relatively smaller amounts and shift your efforts toward the medium to larger debts.

Do you have the proper documentation?
As with all debt recovery efforts, in order for you to have leverage or legally enforce payment of the outstanding debt against the debtor, proper documentation is a must, especially when collecting debt in Mexico. Contracts, invoices, order forms, order confirmations, acknowledgments, any and all correspondence all qualify for proper documentation

Can you find them?
When it comes to successfully collecting debt in Mexico is the ability for a commercial collection agency to contact or even locate your debtor. Do you have up to date information on the company: Company name, including any legal entities, address, phone numbers, etc? Keeping this information current is important whenever you are doing business domestically or internationally as it will aid in the debt recovery process should the need arise.

Collecting Past Due Aerospace Industry Accounts: When To Quit

A question often arises in our offices from our aviation and aerospace industry accounts, “When should I stop my efforts collecting past due accounts?”
Aerospace Industry AccountsUnlike fine wines or select cheeses, past due accounts do not get better with age. Most Aerospace Industry Accounts make the mistake of waiting twice as long as they should before handing over their accounts…

A question often arises in our offices from our aviation and aerospace industry accounts, “When should I stop my efforts collecting past due accounts?”

Aerospace Industry AccountsUnlike fine wines or select cheeses, past due accounts do not get better with age. Most Aerospace Industry Accounts make the mistake of waiting twice as long as they should before handing over their accounts receivables to a commercial collections agency. For instance, did you know your chances of collecting past due accounts in-house drop 12% every 30 days?

When it comes to collecting past due aerospace industry accounts, it͛s important for business owners to remember, collecting on outstanding receivables is a financial process. Because we have an invested interest in our companies, we tend to treat collection as an ͞emotional͟ process instead of a financial one. Whether or not we make or lose money needs to be the determining factor when pursuing collecting past due aerospace industry accounts

For example, Collecting on an invoice that is less than 120 days old holds an 80% success rate while dropping to 40% collectible after that time frame. Because we still see the debt as outstanding, we mistakingly apply the same amount of time and effort trying to collect those older aerospace industry accounts as we do the new ones. Our motto: Don͛t spend a dollar chasing after a dime.

Early warning signs it may be time to stop your collecting past due aerospace industry accounts efforts
Customer avoids contact attempts
Refuses to sign personal guarantee
Customer breaks terms of original agreement Customer breaks their first promise
Customer only makes partial payments to buy more time.
Customer ignores demand letters

You have business to run. You have better things to do than spending your valuable time Collecting you past due accounts. Handing your outstanding debts and aerospace industry accounts receivables over to a commercial collection agency is often your best course of action

If you are a Aerospace Industry business owner trying to collect on past-due accounts, a reputable collection agency can often help. Turning accounts over to an agency for collection may seem like signaling defeat or throwing in the towel to some collectors. Rather than take the defeatist attitude of ͞I can͛t collect this on my own,͟ take the attitude that collection is a team effort with you and your outside agency working together.

International Collection Attorneys

As we covered in our last post on international debt recovery, we discussed a few of the obstacles you will encounter when attempting to recover a debt internationally, including understanding the laws and regulations of the many different countries and finding legal counsel within the jurisdiction of your debtor; both of which can be overcome by using an international collection attorney…

As we covered in our last post on international debt recovery, we discussed a few of the obstacles you will encounter when attempting to recover a debt internationally, including understanding the laws and regulations of the many different countries and finding legal counsel within the jurisdiction of your debtor; both of which can be overcome by using an international collection attorney.
International Collections Attorneys – What you should know

Depending on your debt recovery needs and the client you are dealing with, a multitude of dispute resolution and debt recovery situations could arise. Using an International Collections Attorney will help equip you and your business should you find yourself dealing with international cases involving any form of litigation, including debt recovery, negotiation, and/or arbitration.

Because the focus is solving international disputes, international collection attorneys provide their own unique form of services. Experienced international collection attorneys have developed a thorough understanding of applicable international laws – such as the Foreign Sovereign Immunities Act – dispute resolution, policies and practices by working and dealing with parties throughout the world; including foreign entities, sovereign nations and international banks.

International Debt Collection Attorneys usually possess a database of contacts throughout the world allowing them to gather the necessary information on your debtor allowing them to deal with complex international claims, judgments or arbitral awards and locate and recover any hidden assets your foreign debtor might possess

International Collection Attorneys can also review contracts and work with business owners to include provisions in their contracts that will allow their clients to collect attorney͛s fees and the interest owed on the debt in the event of non-payment. They can swiftly file litigation if necessary severing the very best chance in recovery monies you thought were lost.

Locating reputable International Collection Attorneys can be difficult, though not impossible. A lengthy search on the internet, speaking with (interviewing) those law firms directly, checking their reputation with past and current clients, should produce the confidence you need in the right attorney for your international debt recovery job. Or, you could eliminate the headaches and time-consuming task of locating the right attorney for the job take and hire a Commercial Collections Agency that specializes in international debt recovery.

By hiring a Commercial Collections Agency that works with top International Collection Attorneys, you will be able to focus your energies on your business instead of spending valuable time and resources on collecting delinquent accounts, effectively embracing the 5 benefits we listed in our last post: Communication, Cost Effectiveness, Legal, Risk Reduction and Reputation

Note: At the Stevens-Lloyd Group, Inc., we only work with the very best International Collection Attorneys. Contact is today to learn more about the law firms we work with.

International Debt Recovery – An Essential Skill

International debt recovery is the process of collecting delinquent or outstanding accounts in countries that are outside the creditor’s country of operations.
In order for businesses to be able to conduct operations and compete in today͛s international market and still make a profit, international debt recovery is an essential skill for multi-national businesses…

International debt recovery is the process of collecting delinquent or outstanding accounts in countries that are outside the creditor͛s country of operations.

In order for businesses to be able to conduct operations and compete in today͛s international market and still make a profit, international debt recovery is an essential skill for multi-national businesses to employ in order to maintain cash flow and clear their books of delinquent accounts.

As with domestic debt recovery, international debt recovery needs to have protections put in place for breach of contract or default to reduce risk and clearly state the parties that are responsible for financial harm to others during these commercial activities.

Though similar to domestic debt recovery practices, International Debt Recovery can be one of the most complicated actions your business will ever engage in as transnational debt collection efforts require knowledge of the many different financial regulations and acts of the many different nations your business may operate in. Just a few of the obstacles business run into when attempting international debt recovery include:

  • Understanding the laws and regulations of the many different countries.
  • Finding Legal Counsel within the jurisdiction of your debtor.
  • Consolidating your collection efforts across multiple countries, time zones, and currencies.
  • The language barrier: Communicating/negotiating with the debtor in their native language

For this reason, it is always best to contact a commercial collection agency that has experience in international debt recovery. Collection agencies know whom to contact within their database of representatives that are familiar with the debt recovery practices governing different nations and international bodies. Benefits include:

  • Communication: Commercial debt Agencies often maintain multilingual representatives aiding them in communication and negotiation with your debtor in their native language.
  • Cost Effectiveness: Working with a commercial collection agency in regards to International Debt Recovery can reduce time-consuming costs business often run into when handling it internally
  • Legal: International Debt Recovery agencies are familiar with and are able to operate within the governing laws applicable to specific countries.
  • Risk Reduction: International Debt Recovery Agencies are experienced and highly qualified in transnational collection efforts allowing them to recover your debt faster while at the same time reducing your risk of unsuccessful debt collection.
  • Reputation: Since International collections agencies act on behalf of the original creditor focusing not only on the debt recovery but on preserving the reputation and brand of the creditor.

Hiring a commercial agency that specializes in International Debt Recovery definitely has its benefits. Creditors can focus their energies on their business instead of spending valuable time and resources on collecting delinquent accounts

Note: Using an International Collection Attorney for your International Debt Recovery needs is a smart choice that will often bring higher recovery rates than most international businesses are accustomed to. Click the following link to learn more about International Collection Attorneys and how they can help you International Debt Recovery efforts.

Writing Your Final Demand Letter

What do you do when all other debt collection attempts fail? You have a choice: either let it and your money go or take the matter to the courts. In the case of the latter, in order to file your suit, a written final demand letter is highly recommended by most small claims courts and is in fact required by some…

What do you do when all other debt collection attempts fail? You have a choice: either let it and your money go or take the matter to the courts. In the case of the latter, in order to file your suit, a written final demand letter is highly recommended by most small claims courts and is in fact required by some

Always keep in mind that placing your debt collections in the hands of the court is the last thing you really ever want to do. You want to collect the monies you are owed, not jump through more hoops and invest more of your precious time leaving the decision in the hands of individuals not familiar with all of the facts. This is where the Final Demand Letter comes in. It conveys the need to pay while simultaneously fulfilling your legal requirements. A properly worded final demand letter results in payment in as many as one-third of all cases. We͛ve found that the written word is far more powerful at this stage of the game than verbal communication.

Think about the times you were embroiled in a heated debt collection situation. After exchanging angry words, perhaps even the threat of legal action, what happened? If you͛re like most people, nothing, you didn͛t pursue the claim.

Things change when you write your final demand letter. In your letter, lay out the reasons why the other party owes you money. Be clear to state if payment is not received, you will be left with no other option than to take the matter to small claims court or hand the account over to a professional debt collection agency. With the written word in hand, instead of just another voice of yet another bill collector, you and your claim take on a sobering reality.

With a final demand letter in hand, the debtor must now face the reality that you have no intention of simply going away but will take the matter before the courts or place your account in the hands of a collection agency.

Things to include in your Final Demand Letter
When writing your final demand letter, keep the following points in mind, regardless of whether or not you intend on pursuing them in small claims court

The Opening – Be firm. Immediately grab the readers attention by getting straight to the point of your letter.

Heavy Language – Reference Fine print or legalese in your contract or work order. This will add a serious tone to letter, especially if the customer has signed their name on the same document.

Demand Payment – It is imperative that you express exactly what it is you want. Ask for a specific amount of money to be paid, or for some other specific action to be taken, by a set date.

Consequence – State your intention near the end of the letter and give your customer an opportunity or a potential “out” of this situation (ex: Pay now and preserve your credit rating.).

Closing – Be Polite and professional. Though your attitude is firm and to the point, refrain from any personal attacks or antagonistic language in your final demand letter. You want the recipient to thinking upon receipt of your letter: How much of my time will this take? What are the consequences if I lose? How much more will my additional expenses be? You will often find the other party will be open to making a compromise or settlement.

Be sure to enclose a copy of your invoice or work order and be sure to review the history of the entire dispute. A judge or hearing officer will want to review your letter to familiarize themselves with the facts of the case.

Be sure to send your final demand letter by certified mail. This not only provides you with receipt confirmation if conveys the message to the recipient that you mean business.

(Though not used as much anymore, some business still handle everything via fax. If faxing the letter, be sure to print a confirmation report from your fax machine and attach it to your copy of the letter for proof.)

Note: If your debtor is a corporation, mail your final demand letter to the Statutory Agent, copying the debtor. You can call or visit their Sectary of State͛s website to obtain that information. If the debtor is not a corporation, be sure to mail your letter to the owner or partner; avoid sending it to a manager or clerk. You can pull the credit application you have on file to find the names of the owners, partners or corporate officers. You want maximum impact and who you send your final demand letter to can make all the difference.

Do you have questions regarding your final demand letter? contact The Stevens-Lloyd Group, Inc today. We͛ll gladly walk you through the process.

The Collection Professional: Your Debt Collection Teammate

Quick turnover of delinquent accounts is essential to you as a business owner. When working with a commercial collections agency, viewing your collection professional as a member of your “debt collection team” will prove to be an integral part in accomplishing this goal…

Quick turnover of delinquent accounts is essential to you as a business owner. When working with a commercial collections agency, viewing your collection professional as a member of your “debt collection team” will prove to be an integral part in accomplishing this goal.

As anyone who has participated in any kind of team-related efforts can attest, working together ie essential to your success. By providing your collection professional with a well-documented collections file, you will help them avoid any time-consuming efforts that are associated with gathering the information they need for collections purposes. Many of the necessary documents your collection professional will need have most likely already been collected by you and are already in your client͛s files.

Having previously placed a file for collections, you no doubt have most, if not all of the necessary documents available to you. These documents will ͚arm͟ your collection professional giving them the necessary ammunition to communicate and demand the outstanding debts and receivables from your debtor. Such information would include name, phone number, address, legal identity, etc. Sharing this information with your collection professional helps breed the spirit of teamwork between you.

Proper documentation given to your collections professional at the beginning of your working relationship will allow the collection professional to handle the claim on your behalf, as well as aid in the expediting of the collection process, and provide you with solid legal footing in the process.

Your collection professional knows that good documentation is essential in your efforts and working in tandem with them by providing them with this information at the beginning can very well speed up the debt collection process.

The following is a checklist of documents that will assist your collection professional:
Credit application (or equivalent). This is often the most crucial document as it usually contains:

Debtor’s full name
Debtor’s physical address
Debtor’s legal identity (i.e., corporation, partnership, or sole proprietor.).
Nature of debtor͛s business
Trade references Social Security Number (SSN) or Employer Identification Number (EIN)
Note: Always obtain a Social Security Number of an individual who is personally obligated for your debt

Promissory Note. Though not usually part of the typical goods transaction, having one on hand to be filled out by the debtor is a good practice to engage in when your forbearance of the collection process and a payment plan is requested by the debtor.

Name, Physical Address, and Phone Numbers of any cosigners, guarantors, or companies and/or persons liable.
Principal and Interest after credits Statements
Documentation, handwritten or electronic, of any and all contacts and collection efforts made.
Any Contracts
Purchase Orders
Delivery Receipts
Copies of Non-sufficient Funds (NSF) Checks, notices regarding NSFs required by State Statutes, Or Notices under the Fair Debt Collections Practices Act
Payment Arrangement Confirmations
Security Documents, Agreements, and Legal Notices
Credit Reports, Annual Reports, and/or Financial Statements.
Photocopies of debtor͛s checks (cleared)
Note: You should make it a practice to occasionally make a copy of any checks paid on accounts, especially new accounts.

Notices of Bankruptcy, including bankruptcy of any guarantors or other companies or persons liable for the debt.

Not every document listed above is essential to assist your collection professional in the debt collection process. However, using the above list of documents as a guide in developing your customer files, will assist you should the debt collection process ever become a reality and make you a clutch player for your debt collection team.

Commercial Collection Agencies and Skip Tracing Services

One of the biggest problems that debt collectors often face is locating debtors. When a debtor moves to another house, city, state, or country, the collection agency often has no clue how to locate him. So, how does a commercial collection agency track runaway debtors? The solution is easy: skip tracing services. What is Skip tracing? Skip tracing is the process…

One of the biggest problems that debt collectors often face is locating debtors. When a debtor moves to another house, city, state, or country, the collection agency often has no clue how to locate him. So, how does a commercial collection agency track runaway debtors? The solution is easy: skip tracing services. What is Skip tracing? Skip tracing is the process of locating the whereabouts of a person for any number of reasons. In this case, outstanding debts.

Skip tracing services (Skip tracers) are companies whose sole mission is to locate individuals – in this case, debtors – who have relocated without giving their new contact details to the collection agencies. Skip tracers are employed to help commercial collection agencies find the addresses and contact information for debt collection purposes.

You may wonder how skip tracing services locate people; the process is actually rather straightforward. The easiest way is to use the debtor͛s social security number. Social security numbers are run through various credit bureaus allowing them access to ͞header͟ files from the debtor͛s credit files and/or credit reports. A header file contains just the basic information needed to locate the debtor such as name,address and in some cases, place of employment. Though this information may not seem like much, it is often times all the skip tracers need to help debt collectors find their debtors.

If the skip tracing services are unable to locate the debtor through their social security number, they can perform a national identifier search. Simply put, this is an “old school” system that uses the debtor͛s last known residence as well as his/her name to find their new location.

Skip Tracing Services may use the following resources:

  • Online directories, Phone books, Social Sites and search engines – Debtors may have accounts and profiles across various directory websites and Social Media sites like Facebook, Livejournal, Twitter, Instagram, and others. If not, skip tracing services can use search engines to search for news articles and posts that people on the internet who may have written entries about them or even posted pictures.
  • The Department of Motor Vehicles (DMV) – If the debtor drives a vehicle or has a license registered, it is likely that the DMV will have recent information about the debtor’s whereabouts.
  • Employers – If you know the debtor͛s last place of employment, skip tracing services can approach their boss and inquire about their current employment status. Even if the debtor has moved on to a different job, the employer may still have information that can help the skip tracer locate him
  • Associations, Affiliations, Organizations, and Groups – If the debtor has a specialized occupation, like Engineering or Medicine, they must have membership in certain organizations. Skip tracing services will try to search these various groups to find the runaway debtor.
  • Former contacts – Skip tracing services may visit old neighbors, friends and relatives to obtain information about the debtor͛s current location.

Note: when trying to obtain information about a certain debtor, skip tracing services should never falsely represent themselves as a member of law enforcement or a detective. It is in your best interest to ensure the commercial collections agency you use for your debt recovery steers clear of any and all misrepresentation.

Debt Collection Strategies – Invoice Finance Charges

Are your debt collection strategies like most business owners or are you cashing in on slow paying customers by implementing Invoice finance charges and interest? Debt Collection Strategies: Interest & Finance Charges…

Are your debt collection strategies like most business owners or are you cashing in on slow paying customers by implementing Invoice finance charges and interest?
Debt Collection Strategies: Interest & Finance Charges

Imagine for a moment applying for a loan at a bank. You sit down with the loan officer and somehow manage to obtain a loan for $5,000 at 0% interest. Sounds a bit far-fetched and a little foolish on the part of the bank, doesn’t it? After all, why would a bank loan you money without interest? There’s nothing in it for them; there’s no financial gain for them in taking the risk

However, that’s exactly the kind of “foolishness” you and your business are engaged in with your debt collection strategies if you are not charging interest on your delinquent accounts. In fact, it’s even more so. After all, banks don’t really need the money, however, your business does.

Most businesses are in constant need of capital. In such cases, it is common for a business owner to borrow money from some sort of financial institution, be it a bank, private lender or other business capital. Regardless of the source of the loan, the business will have to pay a finance charge and interest on the money that they borrowed. And yet, no finance charges or interest payments exist in their debt collection strategies and invoicing system when attempting to collect the monies they are owed.

You may find it surprising that when implementing interest or finance charges into your outstanding debts, not only will payment be made faster, you will often receive the interest payment as well. It is a well-known fact that most companies will pay interest bearing invoices first and will relegate non-interest bearing invoices to a later date, often waiting until collection procedures have started. Most businesses use a revolving line of credit. By not paying the outstanding bill, your customer is able to earn, you guessed it, interest on that money

A question you need to ask is how important your services or products are to the vendor. If you are non-essential to the customer, you may find your invoices overlooked in favor of more ͞essential͟ suppliers. Having implemented finance charges into your invoices gives you leverage over the other vendors who do not. Remember, when sending an invoice to a customer, you are competing for their next available accounts payable dollar. It is how well you compete for that dollar that determines your success.

Another factor to consider, by having a finance charge in place, you gain leverage over your customers by having the ability to waive the finance charge in lieu of timely payments.

By applying interest/finance charges to your accounts payable and debt collection strategies, you will help speed up the payment of your invoices by training your customers to either pay according to your terms or to take advantage of your offer to extend your accounts receivables and pay the interest cost. What you will find is that customers will often prefer to extend the collection period paying the interest instead.

Think of debt collection strategies as a chess game: you need to outthink your opponent and stay at least one move ahead of them.

Debt Collection Software VS. Hiring a Collection Agency

Debt collection software are programs designed to help companies track debts. These software programs are designed to keep track of your outstanding receivables, payments owed, fines, penalties and other matters concerning the accounts of debtors. But is it beneficial for a company to buy and use one of these software tools or is hiring…

Debt collection software are programs designed to help companies track debts. These software programs are designed to keep track of your outstanding receivables, payments owed, fines, penalties and other matters concerning the accounts of debtors. But is it beneficial for a company to buy and use one of these software tools or is hiring a commercial collections agency a more reliable option?
The Benefits of using Debt Collection Software VS. Hiring a Commercial Collection Agency
The Benefits of debt collection software
First of all, debt collection software can help you get organized. Instead of having piles of paperwork in the office, debt collection software can consolidate all the information in one place. At the same time, debt collection software can be easily updated. Once the debtor pays a certain amount, it can be easily recorded by the software. This way, you can keep better track of the activities in each account. You will have all the necessary information, including the date and time payment was made and the amount that was paid.

Second, debt collection software is a great way to keep track of your correspondence with your outstanding accounts. Debt collection software has features that allow you to record the exact day and time the collection letters were sent–– In some cases, debt collection software can even record portions of phone calls. If ever the case goes to court, you can use the software to show evidence that you tried to maintain correspondence with the debtor.

Lastly, using debt collection software can often be a cheaper alternative to hiring a commercial collections agency to track accounts for you. For smaller businesses, hiring an external agency or person to do organization and collection of debts can be a bit costly. Debt collection software can prove to be a cheaper alternative

The Benefits of hiring a Commercial Collections Agency

Software programs are tools that can be used to retrieve the funds that are owed you. However, they are just that, tools. And a tool is only as good as the experience of the one using it. With a commercial collections agency, expertise and experience are two things that come with the service and normally exceeds even the most robust programs. Having that expertise working for you improves your chances of recovering some, if not all of the amount you are owed. Agencies often use professionals to collect your money using proven techniques and systems to optimize success

The primary benefit of using a commercial collections agency over debt collection software is the whole point of using them it in the first place: getting paid. By using an agency, you outsource the collection process allowing someone else to aggressively pursue your collection efforts. When debtors are contacted by a collections agency, a certain amount of fear is instilled into the debtor. Without that fear, debtors may be less inclined to respond and are often less concerned about the risks of not paying you what they owe. The consistent and aggressive pursuit of an agency offers a better return on investment for you recovering most if not all of your outstanding receivables.

Documentation is an important factor. A collection agency will keep track of all of their correspondence and collection efforts including direct mail, email, telephone calls, and in-person collection attempts, noting any comments made by the debtor and/or any amounts that have been paid. In doing so, collection agencies put together a timeline and help solidify your case should you choose to sue the debtor in a court of law. As mentioned above, debt collection software will keep track of all of your correspondence, however, it is up to you to input all of that data.

The most important factor of all: time. The software you use should help make debt collection easier. It should help you monitor the accounts, and in the event that the debtor disputes the debt, you can easily use the debt collection software to verify the nature of the debt. Though debt collection software can aide you in the tracking, documenting, and collecting of outstanding debts, it still requires time on your part to monitor the activities, input the information and pursue collection efforts; not to mention all of the time necessary to learn the software in the first place. Your focus as a business owner should be on your business; obtaining new customers and maintaining relations with existing customers needs to be a priority. You need to weigh your time and decide whether your business can afford you spending precious time performing your own collections or if outsourcing the task is the better option.

So which is it, Debt Collection software or Collections Agency?

In the end, it comes down to what is the best fit for you and your business. Whether you use a commercial collections agency or debt collection software for your recovery efforts, the choice is entirely up to you. With either option, there is no guarantee you will recover what is owed. With a commercial collections agency, there is usually a set of standard processes that they follow in an effort to retrieve the outstanding debts. With Debt collection software, whatever processes are used will be entirely up to you.

Collecting Past Due Accounts: When To Quit

A question often arises in our offices, “When should I stop my efforts collecting past due accounts?”
Unlike fine wines or select cheeses, past due accounts do not get better with age. Most businesses make the mistake of waiting twice as long as they should before handing over their accounts receivables to a commercial collections agency…

A question often arises in our offices,”When should I stop my efforts collecting past due accounts?”

Unlike fine wines or select cheeses, past due accounts do not get better with age. Most businesses make the mistake of waiting twice as long as they should before handing over their accounts receivables to a commercial collections agency. For instance, did you know your chances of collecting past due accounts in-house drop 12% every 30 days

When it comes to collecting past due accounts, it͛s important for business owners to remember, collecting on outstanding receivables is a financial process. Because we have an invested interest in our companies, we tend to treat collection as an ͞emotional͟ process instead of a financial one. Whether or not we make or lose money needs to be the determining factor when pursuing collecting past due accounts.

For example, Collecting on an invoice that is less than 120 days old holds an 80% success rate while dropping to 40% collectible after that time frame. Because we still see the debt as outstanding, we mistakingly apply the same amount of time and effort trying to collect those older accounts as we do the new ones. Our motto: Don͛t spend a dollar chasing after a dime.

Early warning signs it may be time to stop your collecting past due accounts efforts
Customer avoids contact attempts
Refuses to sign personal guarantee
Customer breaks terms of original agreement
Customer breaks their first promise
Customer only makes partial payments to buy more time.
Customer ignores demand letters

You have business to run. You have better things to do than spending your valuable time Collecting past due accounts. Handing your outstanding debts and accounts receivables over to a commercial collection agency is often your best course of action.