The Stevens-Lloyd Group, Inc.

Disappearing Debtors: Improving Your Chances of Successful Debt Collection

Few people are knowledgeable when it comes to collecting money and commercial debt recovery agencies. Debts have mounted throughout world economies and the need for collection agencies have risen. Business to business debt collection is often most successful when a professional collection agency is involved. Collection agencies are like dentists in the sense that you hope you never need one but if you do you want the best. There are thousands of collection agencies in the United States to choose from. The Stevens-Lloyd Group has over 60 years of combined experience in the commercial debt collection arena. As a commercial debt recovery firm, we understand the urgency of recovering outstanding accounts receivables.

But imagine dealing with a debtor who suddenly disappears by changing their address and contact information without notifying you. It might at that point seem like you have lost your money, but you must bear in mind that it is unlikely that anyone would be able to simply vanish off the earth’s surface.

When placing business with a corporate debt recovery firm, to ensure the highest possible rate of success at locating debtor companies, be sure to provide as much information as possible. The more knowledge the commercial collections agency obtains from their clients the greater the chances of successful debt recovery.

This material must include names of owners, officers or directors and spouses. Moreover, business and personal addresses, telephone numbers and email addresses are critical pieces of information. By providing this information and maintaining communication with the commercial collection agency, the process will be less frustrating and more effective.

Prior to placing the account with the commercial collection agency, we recommend that the creditor mail a firm ten-day demand letter to the debtor which incorporates a deadline of payment in full. This enables them to understand how long they have left to pay the debt before the file is placed with an outside debt collector. If the debtor company does not respond or effect payment in full after a few letters, making phone calls and demands for payment need to take place. However, if the debtor avoids communication or disappears, it is time to deploy a professional debt recovery firm.

Furthermore, when you employ the services of a business collection agency, make sure you utilize a firm who will not harass and intimidate your customers and operates in an honest and ethical fashion. If the debtor cannot be located, another option the collection agency may have is to retain private investigators who can conduct a skip tracing investigation and locate the new address and contact information of the debtor company. This could prove to be most effective in ultimately recovering your money. And working with a commercial collection with experience dealing with a multitude of different industries, debt can be successfully collected from anyone, anywhere.

Getting the Best Service from Your Commercial Debt Collection Firm

As you are no doubt are aware, there are many commercial debt collection firms available for you to choose from. While most of those companies are more than effective at recovering debt, it should be noted that each commercial debt collection firm usually focuses on a specific type of industry or size of the company…

For instance, if you are owed money from a small business, you would want to talk to a commercial debt collection firm that specializes in debt collection recovery from small business owners. On the other hand, if you are dealing with a Fortune 500 corporation owing your company a substantial amount of debt, then a commercial debt collection firm that has experience and legal know-how to work with large, powerful corporations is ultimately necessary.

Professionalism is key when choosing the right Commercial Debt Collection Firm for your needs.

The commercial collections industry is replete with stories of commercial debt recovery gone horribly wrong due to unscrupulous collection efforts and shifty agents working on behalf of the company. By attempting to collect your outstanding debt using unprofessional techniques, you will more than likely not only fail at recovering the debt but could very well damage your business͛ reputation along the way.

Make sure you choose a commercial debt collection firm that is highly professional, knows and abides by the laws regarding debt recovery – especially in international debt recovery situations –and handles themselves correctly when attempting to recover a debt, particularly in sensitive situations.

The right commercial debt collection company knows how to recover your outstanding debt in a professional manner, causing minimal ripples along the way, while keeping your reputation intact.

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.

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…

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 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 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.

Credit Management Services: 7 Tips for Success Guaranteed to Recover 100% of Your Outstanding Receivables

With billions and billions of dollars in debt worldwide, both creditors and collection agencies are feeling the pressure. Debt collectors looking to recover outstanding receivables must employ techniques that will encourage debtors to pay. Successful debt collection and outstanding receivables collection techniques will help the collector get the account settled immediately, while still being mindful of the laws that protect debtors.

Meet Joy Paul

Joy Paul is the dynamic and energetic Marketing Director, In-House Collections Manager and part-owner of TM Building Damage Restoration, a licensed general contractor. Located in Tucson, Arizona for over 30 years, TM offers complete fire, water, wind, hail, collision, vandalism/burglary, and sewage back-up damage restoration and mold remediation. They’re also a dual licensed roofing contractor, with emergency construction, cleaning, and restoration crews on call 24/7.

Issues Faced

As an in-house-collector, Joy encountered many excuses from clients delinquent in paying their invoices. She’d heard everything from, ͞I never received a bill to “my invoice was incorrect”, or ͞TM Building Damage Restoration [allegedly] didn’t do all of the work. Another frustration Joy occasionally faced was when doing work for friends. Seems many times that friends just didn’t pay their bills! She reported that one-third of her cases were downright fraudulent.

Then approximately five years ago, TM Building enlisted the assistance of The Stevens-Lloyd Group, Inc. a corporation specializing in domestic and international commercial debt recovery. Joy teamed up with the Stevens-Lloyd Group and instituted a program which proved successful in recovering nearly all of TM Building Damage Restoration’s outstanding receivables!

The Following are Joy’s Tips for Recovering Outstanding Receivables:

Tip #1 – Document Everything

Joy utilizes an extensive phone log. She keeps detailed call records, conducts research on her customers utilizing TM Building’s database, and even notes the customer͛s last date of payment. Joy reports in clear yet simple terms, and manages her activities to control the territory. Joy notes that verbal skills just aren’t enough. It’s imperative to accurately document each call, thereby being instantly able to retrieve any account. This allows her to whip through skip tracing resources quickly and productively while planning and managing an inventory of many accounts

Tip #2 – Call Weekly On All Accounts Over 30 Days Old

Joy developed a system which consists of calling weekly on all accounts which show it’s been 30 days since the job was completed. She keys in on accounts which are mainly in the $7,000 to $9,000 range. When recovering debt, Joy notes that the phone is ten times more effective than written communications. It’s imperative to get on the phone early and skillfully resolve unpaid accounts. A reminder that the phone is a cost-effective investment that will retain customers who can be saved.

Tip #3– Demand Payment in Full!

When Joy contacts the debtor, she asks for payment in full. Typical responses may be,”Yes, I’ll pay’, “No, I won’t pay”, a vague reply of neither yes nor no, or silence at the end of the phone line. If the answer is, “No, I won͛t (or can’t) pay”, find out why and resolve the situation. Determine if the problem is slow business or accounts receivable issues. If it’s the latter, ask the debtor when he expects his receivables to come to fruition. The debtor’s priorities may be other suppliers he has to pay, outstanding bank loans, or payroll for instance. Make it to number two or three and push it up his priority list!

Put pressure on the debtor. On large amounts owed, you may want to make a demand for a financial statement. You ask for a financial statement if the debtor needs to buy product from your company or if he is requesting a payment plan. Financial statements consist of an operating statement and a balance sheet. Total of assets column equals total of debt net worth column. You want to know if the debtor͛s current flow of cash is sufficient to pay your debt. Pay particular attention to the bottom of the financial statement. If the assets exceed the liabilities, the debtor is in good shape and can pay his debts!

On the other hand, a positive response may be,” ͞Thank you for reminding me, I’ll pay you in full today.”But more often than not, you’ll have to nail down the promise. Experienced collectors can tell you that there are plenty of debtors who’ll promise you anything you ask, just to get you off the phone.

When you get a promise to pay, say something to the effect of, ͞That’s great, Mr. Debtor. Let’s see now, today is the twelfth and mail service takes about 2 to 3 days, so if you send it today, I’ll certainly have your check by the fifteenth. I’ll mark my calendar for the fifteenth so I’m sure not to miss it

Tip # 4 – When to Offer Payment Plans

When debtors balk at payment in full, Joy advises, “We’re not a bank; we have to pay our expenses upfront.”

However, sometimes she has to offer payments.* There are a limited number of payment offers if she can’t secure payment in full. The first is two payments. The next, obviously, is three. When she makes these offers, Joy makes it clear that she’s “breaking the rules, this is a one-time offer only.”Therefore, no precedent is being set and she may even risk getting into trouble by offering the option.

*Joy offers no settlements or discount programs on delinquent accounts

Tip #5 – How to Handle Slow Payers and Stalls

Debt Collecting Percentages

Collecting is negotiation. The debtor wants to delay. You want it all now. Collecting is selling. Qualify the prospect, decide whether she’s going to pay, ask probing questions.

Collecting is percentages – the more contacts made, the more money comes in. “Go to bat as often as possible.”

Collecting is a game. The debtor will attempt to manipulate. Confront them and stop the game

oy deadlines the debtor. For instance, Mr. Debtor, pay by October 31st to avoid being charged interest or being turned over for collections

Typical stall tactics Joy comes across are,” ͞The owner is out of the country”, or ͞I never received your bill.”Other “stalls debtor’s use are, ͞I have other bills to pay; I can’t pay anything now”, or “We can pay you when our customer pays us.”And finally, ͞I need an extension on this.”

Joy learned early on in the process the art of saying, “No”

Tip #6 – Role Playing

The Stevens-Lloyd Group showed Joy Paul and TM Building the value of “role playing”. Role playing stars YOU as the debtor. Only two people get to talk. Each person must stay in the rule. The players don’t have to look at each other. Non-playing members actively listen and the group offers evaluations.

Simply stated, if you want to become a great cook, you won’t achieve your goal just by watching a top chef on TV. You have to parlay your knowledge into a state of confidence and proven results. Role playing is a great technique for achieving a consistent level of success in recovering debt!

Tip #7 – Finance Charges

Philosophically speaking, if you add a finance charge or interest, your bill will be paid faster. Without it, time is on the debtor͛s side since it costs nothing to delay payment. There͛s actually a disincentive to pay because an unpaid bill earns interest for the debtor.

To reduce the negative incentive, Joy makes the debtor pay for sitting on her money. Interest, service charge, etc., must be properly disclosed. TM spells this out on their Work Authorization Form.