Debt Recovery

It is common for collection agencies to charge an onboarding fee to their new customers. However, a few good collection agencies with nationwide coverage waive their setup fee regardless of the number of accounts you have for collections.

Contact us if you need a collection agency with the following features.

• No setup fee and no hidden charges. We guarantee it.
• Open-ended contract with no minimums and free credit bureau reporting.
• High collection rates and an easy-to-use online client portal.
• Offers both Fixed-fee service and Contingency-only based collection services.
• Cares about your reputation by not indulging in aggressive collection tactics.
• GLBA, FDCPA, TCPA and PCI compliant.  ( Obeys government-mandated rules and handles data securely)

With over 3000 collection agencies all over the USA, selecting a good collection agency can be a daunting task.

Selecting a mid-sized collection agency will ensure that you get adequate attention and that compliance with national and state laws is entirely followed.

 

Lumber companies provide hardware, lumber, and building materials for professional contractors and home builders. However, not all their invoices get paid on time. It is common for lumber companies to have overdue AR that runs into tens of thousands of dollars.

Based on our experience, average outstanding debt is about $5K and are generally B2B (Commercial) debts. Recovery rates for lumber companies is generally excellent.

This figure can run into millions of dollars for large lumber companies.

1. Most common excuse: Clients often say they’re waiting for their own bills to get paid before they can pay you.
2. Fact: Delayed invoice payments increase the risk of non-payment.
3. Fact: Late payments significantly harm cash flow and profits.
4. Why involve a Collection agency: Persistent calls and legal jargons from a collection agency ensure your payment takes priority among your client’s numerous bills, motivating them to settle your payment first.

Collecting money for Lumber Companies Nationwide Contact us and start recovering. High recovery rates.

Lumber companies often need professional help to negotiate non-payment cases and work with the legal team for lien processing and collection of delinquent accounts. These debts can be B2B and even B2C.

Let us accept the fact. The employees of the accounting team of lumber companies are not professional debt collectors. They do not have the required tools for debt collection or the time. Accounts that become 90 days past due have a very high chance of falling into that permanent delinquent status. Rather than waiting for a few months and writing off the debt, it is better to hire a collection agency on time and recover the maximum money possible.

A good collection agency should be an expert in your area and must provide references of other lumber companies they have served.

Business and medical professionals seeking to hire a collection agency always wonder if the agency they hire is ethical or if it may damage their reputation. 

Here are some valuable tips on how collection agencies can maintain a good reputation online and offline.

• Following Federal and State laws: A collection agency that violates government laws will get sued or penalized sooner or later. This violation can be all over the news, and this incident will remain in electronic news outlets for years. 
• Google Ratings: Checking Google ratings are the #1 place for almost everyone when shortlisting a collection agency. Asking your happy customers or satisfied debtors can improve your online reputation by many folds.
• Amicable collections: Using harsh, abusive, unfair, or deceptive practices to collect debts from your debtors can severely damage your reputation. 
•  BBB Rating: Although millennials may not care much about Better Business Bureau ratings, this is often quite important to people over 55. People in this group can be real decision-makers.
• Scholarships: Giving college scholarships, sponsoring a community event, and donating a small percentage of profit for a social cause, then publishing those events on your blog or press release can work wonders for your collection agency’s reputation.
• References: Positive references from existing customers and publishing them on your website can be very effective. Businesses may not believe what you tell them, but positive reviews from their peers are very impactful.
• Good recovery rates: Last but not least, if you recover more money for your customers, they will likely refer your service to their friends, who may also be looking to hire a debt collector.
• Be vocal about your compliance: Compliances like GLBA, PCI, HIPAA, and affiliations like ACA are essential to comfort potential clients.

 

Fed Chairman Jerome Powell is increasing the interest rates, which has triggered an economic slowdown. People have been losing jobs, the housing market has already slowed down, and we read news about job losses almost daily. Most economists believe that a recession is inevitable.

Impact of Rising Interest Rates on Consumer Debt

• Credit Card Debt: Higher monthly payments since they charge a higher interest rate.
• Higher mortgage and car loan payments.
• Everything around you gets expensive, including food and clothing.
• Job losses/layoffs.
• Higher electric and cable costs.
• People lose money in the stock market.

People tend to spend more money on bare essentials than pending bills like medical and student debt. 

The more you defer working on your overdue bills, the financial situation of your customers/debtors will deteriorate.

Your customer likely has other debts besides yours. Therefore, getting paid at the earliest should be your priority before they use their money on other necessities or decide to make other payments before paying you.

The probability of getting paid will decrease with each passing day, and your overdue AR should be your number one priority.

Need a collection agency that can quickly work on your outstanding invoices? Contact us

The US government has thrown several laws on collection agencies, making bad-debt recovery harder and costlier. Lower recoveries mean, low recoveries and extensive loss for businesses and doctors. Our government’s intention behind these laws is not wrong, but the ground reality is different. 

Extra costs to comply with these laws would be passed on to businesses /creditors unwilling to pay the current expenses of hiring a professional debt collector.

There are thousands of collection agencies in the USA, but most are small. They have less than ten people and work from small offices. The following changes can result in many collection agencies shutting their businesses. 

New Regulations

1. As per FTC, starting June 9, 2023, all collection agencies will be treated as financial institutions. This means all collection agencies must secure consumer data nearly the same way as banks.
   Read: Impact of the GLBA on Collection Agencies
   
   
2. As of Nov 2021, The new debt validation notice format recommended by CFPB makes it easier for debtors to dispute the authenticity of debt. Debtors who would have usually paid quickly are now disputing the collection notices more than ever. All these delays and extra paperwork means higher cost, lower recovery, and more time to recover debts.
   Read this: https://nexacollect.com/debt-recovery/validation-letter/
   
   
3. In another CFPB order, all collection agencies must provide the balance as of a specific date and itemize all interest, fees, payments and adjustments from that date. Not all clients have this information handy. Many clients would take the loss upfront rather than wasting time digging into all the detailed documentation required to submit an account for collections. 
4. The government and even credit bureaus are creating roadblocks for hospitals, doctors and dentists, who rely on collection agencies and credit bureau reporting for medical debt recovery. Credit bureaus will soon stop reporting medical debts lower than $500, remove medical line items that have been fully paid, and collection agencies now have to wait one year before medical debts can be reported. Suppressing how medical reports are reported to the credit bureaus will surely increase the cost of healthcare, more defaults, more legal mess, and higher risk for future creditors.
   Read: Making Medical Credit Reporting Harder is a Disaster in the Making

These laws are on top of all the existing Federal and State laws. These include FDCPA, TCPA, HIPAA, FCRA, and many more.

These laws can have a positive perception of people on lawmakers, but as usual, it is making doing business harder than ever.

Simply writing off past-due accounts is a common approach among several businesses. We see this as leaving money on the table.

The primary reason for not following up on receivables is that most businesses are short-staffed, and their staff have little or no time left after completing their primary job responsibilities. Therefore, after a few initial follow-ups, they let go of their debtors.

The cost of hiring a dedicated employee to recover bills usually does not make sense because his employment costs are often equal to the money he may recover. Then why even take this headache?

Hire a Collection Agency – Minimize Defaults

Your businesses should seriously consider hiring a collection agency. Here are the main reasons for not hiring a collection agency and sending unpaid accounts to them. Many companies avoid debt collectors due to the following reasons.

1. They are not sure which collection agency to hire. They fear a collection agency’s involvement may hurt the company’s reputation. This perception is incorrect because several collection agencies have an amicable, respectful, and diplomatic way to recover the debt without harming your company’s reputation. Always go for a collection agency that has nationwide coverage.

2. Costs associated with hiring a collection agency. There is a cost of hiring a collection agency, but those costs are minuscule compared to the returns you can get.

3. Extra time will be needed to work with a collection agency. Although true, you do not need more time than you already spend trying to collect your unpaid bills. Therefore, even though you may be short-staffed, you do not need more people to work with a collection agency.

4. Data security of your customers. This is a pronounced concern, what happens when you share your data with a collection agency? Will it be kept securely or not?

This is a very genuine concern. You must ask the collection agency if they have a SOC security certificate, is HIPAA compliant, and if they have vendors located outside the USA. These simple questions can address your data security concerns.

There are several other reasons. However, the number one reason businesses are so unsuccessful with their accounts receivable is that they are short-staffed. Sending accounts to a collection agency once your B2B or B2C accounts are over 60 days past due will result in phenomenal recovery results.

Need a collection agency that is secure, amicable and easy to work with: Contact us

Things you can do internally

It is important for the company to address AR to ensure financial stability. Here are steps that the company can take to address the challenges in recovering AR due to being short-staffed:

1. Assess the Situation: Conduct an assessment to understand the scope of the issue. Determine how much is outstanding in AR and identify any trends, such as specific clients that are consistently late in paying.
2. Prioritize Receivables: Prioritize recovering the AR based on factors such as the amount due and the age of the receivable. Focus on the larger and older receivables first.
3. Communication with Clients: Reach out to clients to remind them of outstanding invoices. Sometimes a simple reminder can prompt a client to pay. Consider implementing automated reminders through email or phone.
4. Consider Temporary Staff or Outsourcing: To address the issue of being short-staffed, the company could hire temporary staff or consider outsourcing the AR management to a third-party agency that specializes in collections.
5. Review Payment Terms and Policies: The company should review its payment terms and policies. Shortening payment terms or implementing late fees might be necessary to encourage timely payments.
6. Implement Efficient Systems: Use accounting software to automate some AR processes. This can include sending out invoices, reminders, and tracking payments. Automation can help in managing the AR efficiently, even with limited staff.
7. Focus on Relationship Building: Building strong client relationships can sometimes help recover AR. A good relationship might make clients more likely to prioritize payments to your company.
8. Offer Payment Plans: For clients struggling to pay their invoices in full, consider offering a payment plan that allows them to pay in installments.
9. Seek Legal Advice: If receivables are overdue and the client is unresponsive, it may be worth consulting with a lawyer or legal team to explore options for legal recourse.
10. Monitor and Report: Regularly monitor the status of AR and generate reports. Share these reports with key stakeholders within the company to ensure that everyone is aware of the status and can take necessary actions.
11. Staff Training and Resources: Ensure that the staff members involved in AR management are well-trained and have the resources they need to perform their duties effectively.

By taking these steps, the company can work to mitigate the challenges faced due to being short-staffed and focus on recovering the accounts receivable effectively.