Debt Recovery

Why Invoice Specificity is Important for Healthy AR

They say that the devil is in the details. This is generally true, but when it comes to invoicing, the devil is in the details omitted.

Invoices that are vague, confusing, or lacking in basic information are much harder to collect than invoices that spell things out. This might seem like an obvious point, but many businesses don’t realize their invoices aren’t as clear as they could be.

Maintaining healthy accounts receivable is challenging enough without your invoices working against you. This article will reveal some of the ways that your invoice specificity can be improved, resulting in faster payments and fewer delinquent accounts.

Make Sure You’re Using Accurate Contact Information

Employees come and go. If you’re a B2B company, that means your clients’ billing contacts can change over time. If you don’t keep your contact information up to date, you may end up sending invoices to an employee that no longer works for the company, delaying payment.

It’s also essential to use the full legal names of the people and companies you do business with. If one of your clients goes by ABC Supply, but their full legal name is ABC Supply and Distribution, Inc., don’t use the shortened version.

In the unfortunate case that you have to send an account to collections, having the full name on all invoices makes it easier for the collection agency to locate the right entity. It also prevents possible claims by your client that the entity named on your invoice isn’t them. To that end, always include your customer’s address and phone number.

Spell Out Your Payment Terms

Don’t assume that your customers will remember the payment terms you negotiated when your relationship first began. Left to their own devices, they may choose to pay you on their schedule.

Instead, list specific terms on every invoice. Include the customers allowed payment window, any discounts you offer for speedy payment, and any penalties incurred when payments are late. Make sure the information is featured prominently so that there’s little chance your customer will miss it. When they know what’s expected of them, the chances of compliance increase.

List Services Rendered in Detail

Patronize any retail establishment, and you’ll leave with a detailed, itemized receipt. This piece of paper leaves no question regarding what you purchased and what you were charged for. Invoices should do the same thing.

This doesn’t mean you need to itemize individual charges. Many businesses prefer to keep their hourly rates or individual services costs hidden. But you should include a detailed description of the work provided, even if it all falls under a single total.

Being verbose helps prevent billing disputes that can slow down or stop payments. This is particularly useful when your invoice also functions as a bill of sale. When you elucidate final deliverables, there’s less chance of damaging miscommunications.

Include Instructions and Details for Multiple Payment Methods

Not all customers like to pay the same way. And some may cycle between methods, depending on their business situation. Providing as many ways to pay as possible helps ensure that your customers can access the method they prefer, helping speed payments.

However, similar to payment terms, your customers may not remember all of the payment options available to them when they receive your invoice. Providing details for every payment method you offer on each invoice reminds your customers and gives them instant access.

For services like Venmo and PayPal, list the email associated with payment. Provide a link to your credit card portal. Make sure your name and address are present for check payments. And, if you send digital invoices, you might consider including links to how-tos to help clients pay using services they aren’t familiar with.

Number All Invoices Using a Consistent System

If you aren’t numbering your invoices, you’re making it much more difficult on yourself when you need to find one, particularly if they’re stored digitally. If you’re numbering them, but using a poorly-devised system, the same issues may occur. Payments can slow down or cease if a client raises an objection and you can’t locate your original to settle the problem.

The most important feature of an invoice numbering system is that every invoice has a unique code that’s logically tied to your clients. You may consider a numbering scheme like this:

20acme001

“20” is the year, “acme” is the first four letters of your client’s name, and “001” is the first in a sequence of numbers. Each time you send an invoice to Acme Supply, you iterate the last three digits. At the turn of the year, you update “20” to “21” and the sequence over again.

This short invoice number gives you a lot of information to help locate an invoice. You know the company that was billed, the year the invoice was created, and its position in that customer’s invoice sequence.

It should be clear that invoice specificity can lead to dramatically better AR performance. Try these suggestions for yourself.

Commercial Real Estate Lease Defaults: Hire a Collection Agency

The current COVID-19 pandemic and the drastic measures that governments undertook to slow the disease’s spread have devastated the global economy.

Unemployment climbed precipitously in the pandemic’s early months. In the United States, it peaked in April at 14.7%, wiping out the previous decade’s gains in a matter of months. Businesses around the country and the globe were forced to close, with many remaining so today, or operating at a fraction of their average volume. The “default clause” is the most important part of your commercial lease agreement and will help to get a judgment to evict the tenant and recover your dues.

Recovering money for Commercial Property Owners, Landlords & Malls

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High Recovery rate. Referrals can be provided if requested.

The financial pressures have triggered feverish increases in the number of loan impairments for residential and commercial real estate loans. The more impaired a loan becomes, the greater the chance that the borrower will default, causing partial or total losses for the lender.

Before the 2008 financial crisis, CRE’s made up nearly 50% of many smaller banks’ portfolios, and that number remains elevated above comfortable levels today. If economies stay restricted through the end of the year, or longer, the number of CRE defaults could balloon, triggering dangerous losses at all levels of the banking industry.

In response, lenders are moving into defensive positions, putting aside record amounts to cover potential losses. The largest lender in the U.S., JPMorgan, designated a $6.8 billion credit reserve to overcome the possible downturn. Other banks are following suit.

These reserves will keep them solvent for the first round of defaults, but questions remain regarding the future if current trends continue. Both large and small institutions are putting measures into place to minimize losses. Only time will tell if they are successful.

The Difficulties of a Delayed Reaction

Historically, delinquency and default rates are time delayed, adding to the uncertainty faced by financial institutions.

For example, the 2008 global financial crisis began in 2007. It wasn’t until September of 2008 that the first bank failure occurred. At that point, commercial and multifamily loan delinquencies hadn’t moved much from their resting state of .6%, reaching only 1%. It wasn’t until 2010 that delinquencies peaked over 4%. From there, it took nearly six years for the delinquency rate to return to pre-crisis levels.

Fast forward to the current recession. As of the second quarter of 2020, commercial and multifamily loan delinquencies were still below 1%. The question commercial lenders are trying to answer is how closely delinquency and default trends will follow the last crisis.

If we don’t see the full extent of the damage for another year or two, lenders need to position themselves now to minimize their exposure. Those institutions that are most aggressive in their defensive measures will likely avoid losses at higher than average rates. So what can they do?

How Institutions Can Limit Their Losses

There are several options open to commercial lenders. First, they’re moving to help current borrowers stay out of delinquency. Many are offering to renegotiate due dates and extend payment deadlines on their lease. These short term measures help businesses through the shutdowns, allowing them to delay payments until they can reopen and generate appreciable revenue again.

However, the strategy’s effectiveness depends on how long it takes for businesses to reach solvency. The longer that restrictions last, the less likely it becomes that companies will find their footing in a reasonable amount of time.

In response, lenders are making it more difficult for businesses to qualify for new loans. This limits their exposure on new lending. Borrowers with lower credit ratings likely won’t qualify at all, while higher-rated customers may find their borrowing power reduced.

This tightening of the credit market should help offset long-term losses. However, in the short term, limiting access to emergency credit could worsen conditions for many businesses, edging them closer to bankruptcy.

To forestall defaults, lenders may find themselves helping businesses take advantage of relief efforts offered by the federal government. Maintaining their clients’ liquidity over the next 18 months may allow banks to avoid the worst predictions for accumulated losses.

The reality is that no one knows what will happen. If a viable vaccine becomes available by the end of 2020, business, as usual, may return relatively soon. But even in that most hopeful of outcomes, it’s unclear when consumer spending will return to pre-crisis levels.

Lenders must entrench, lend conservatively, and work to protect customers in the most vulnerable markets if they want to come out less battered and bruised on the other end.

HYBRID Recovery: Best Way to Collect Unpaid Medical Bills

Hmmm .. What is Hybrid Collection Service??

The “in-between” recovery program that fixes the biggest AR mistake: Waiting too long.

Most medical practices don’t lose money because patients never pay. They lose money because the account sits in limbo:

Your team keeps “following up”
The patient keeps “meaning to pay”
And then suddenly it’s 120+ days past due and hard collections is the only lever left,

Hybrid recovery was built for that exact gap.

It’s not a harsh collections program, and it’s not passive billing either. It’s a structured, time-based escalation that starts right when accounts begin to slip—at 75 days past due—so you don’t wait until the balance is stale.

What “Hybrid” actually means

Hybrid collection service blends two approaches into one predictable timeline:

A final, patient-friendly reminder letter that looks like it came from your practice
A controlled escalation into demand letters from the collection agency only if the patient still doesn’t respond

This is why it works: you get early action without instantly “turning the account over.”

The Hybrid timeline (simple and predictable)

Once an account hits 75 days past due, it enters the Hybrid program.

Step 1: Day 76 – Final Reminder Letter (sent on your behalf)

On the 76th day, the collection agency sends a letter on your behalf to the patient.

This is the final REMINDER letter
No mention of the agency’s name
It reads like a firm, professional final notice from your office

This letter often triggers payment because it feels like the account is reaching a deadline—without creating fear or resentment.

Many practices see a large portion of Hybrid accounts pay directly back to the provider after this first step.

Step 2: Day 91 – 1st DEMAND Letter (from the collection agency)

Still no payment?

After 15 days, the 1st DEMAND letter goes out — this one is sent in the collection agency’s name and clearly demands payment.

This is where the urgency increases. The patient understands:

“This is no longer routine billing.”
“There will be consequences if I ignore this.”

At this point, the likelihood of payment typically increases sharply because the account has officially entered a more serious phase.

Step 3: Every 10 days – 2nd, 3rd, and 4th DEMAND letters

If the account remains unpaid, the collection agency sends the next demand letters every 10 days:

2nd Demand Letter (stronger tone)
3rd Demand Letter (clearer urgency and consequences)
4th Demand Letter (final escalation warning)

Each letter increases intensity in a controlled, compliant way—without jumping straight to “scorched earth” collections.

Why starting at 75 days matters

Hybrid service exists because timing is everything in patient receivables.

At around 75 days past due:

The patient still remembers the visit
Contact details are still fresh
The balance hasn’t aged into “ignore it forever” territory
Your team is usually feeling the drag (more calls, more excuses, more time burned)

Hybrid removes the ambiguity of “when should we send this to collections?” by making it a defined part of your internal AR workflow.

Instead of waiting until 90+ days to start soft collections, you start the process before the account gets cold.

What types of accounts Hybrid is best for

Hybrid is ideal for accounts that are:

Patient responsibility balances after insurance processing
Self-pay balances that have received multiple statements
Accounts that are not actively in a documented dispute
Accounts not already on a reliable payment plan
Accounts where your team is getting slow responses or broken promises

If the patient is genuinely engaged and paying, you don’t need Hybrid.

If the patient is silent, stalling, or repeatedly “forgetting,” Hybrid is the clean middle step before heavy collections.

Why patients respond to Hybrid (without trashing your reputation)

The Hybrid approach is built around a simple psychology:

Most patients don’t wake up wanting to dodge bills.
They procrastinate. They feel overwhelmed. They avoid calls. They don’t open statements.

Hybrid breaks the avoidance loop by creating:

A credible deadline (Day 76 final reminder)
A serious escalation signal (Day 91 demand letter)
A clear countdown (letters every 10 days)

It’s firm, consistent, and harder to ignore—without being abusive or aggressive.

Cost and ROI (what makes Hybrid attractive)

Hybrid is designed to be low-cost and scalable.

Average cost per account is typically around $15 per patient
Accounts can be purchased in advance
Or you may qualify for a pay-as-used version (often for a small additional cost per account)

The reason practices like it: you’re not paying contingency fees on a large batch of “still recoverable” balances. You’re using a predictable, low-cost program to keep your AR from aging out.

What happens after the Hybrid letters?

If an account remains unpaid after the sequence, it can be transferred for more intensive collections based on your policy.

At that point, you’re no longer guessing.
You’ve already given the patient:

A final reminder
Multiple escalating demand opportunities
Plenty of time to resolve it voluntarily

So if it needs stronger action, it’s justified—and documented.

The real benefit: Hybrid becomes part of your AR system

Hybrid works best when it’s treated as a standard operating procedure:

Every account hits 75 days → it enters Hybrid
Your team stops wasting hours chasing accounts that don’t respond
Your practice stays consistent and professional
Cash comes in earlier, with fewer “120+ day surprises”

Want to use the Hybrid program?

If you’re interested in Hybrid recovery, share a few details:

Your average patient balance size
How many accounts typically hit 75+ days per month
Your current follow-up process (statements, calls, texts)
Whether you want accounts to pay you directly first (preferred in Hybrid)

We’ll align the Hybrid timeline to your workflow so it feels like a natural extension of your billing process—not a sudden handoff.

Contact us, and please mention that you are interested in the HYBRID medical collection service.

How Data Analytics Can Help Your AR

In a data-driven business world, knowing how to use data analysis tools optimally and what the advantages of data models are will allow you to assess the efficiency of your Accounts Receivable department. Predictive analysis can help monitor and manage outstanding receivables, and post-collection data will identify the most effective payment recovery methods.

Main KPI’s to Measure Recovery

These are the main Key Performance Indicators (KPIs) used to measure recovery or collection of receivables:

1. The Collection Effectiveness Index (CEI) is a metric that calculates the total receivables over a certain period of time and the percent that is actually recovered over the same period.

2. Profit per Account (PPA) is exactly what it says: the average profit made for each account, calculated by dividing the gross profit of the company by the total number of accounts receivables.

3. Turnover ratio. Account turnover ratio measures the company’s effectiveness in recovering money owed by customers.

(Formula: Account Turnover Ratio = Net Credit Sales / Average AR )

To improve the account turnover ratio, may businesses and medical practices transfer delinquent accounts to a medical collection agency or a small business debt collection agency. Professional debt collectors can help in reducing average AR, thereby improving your account turnover ratio.

4. Cash-to-cash cycle time (CCC) is the period of time between when your business pays your suppliers and when you receive payments from your customers. This is usually expressed in days.

5. Average Days Delinquent (ADD) indicates the average number of days your invoices are left unpaid after the past due date.

6. Days Sales Outstanding (DSO). This KPI may seem directed mostly at merchants, but service providers also use it. It refers to the average collection period after a sale has been made or a service has been provided.

Why is Data Analytics Important?

Small businesses often ignore the benefits of this intimidating process, but it can be as sophisticated or as simple as you need it to be. Regardless of whether you use basic charts and graphs in Excel every now and then, or pay for a complex program which requires training, its benefits are hard to ignore. The best and easiest way to start is with a batch of sample data in an Excel file, so you can get some initial perspective on and familiarity with your company’s data using the metrics above and so you can see if the amount of work to analyze your data points to a need for outside assistance.

Admittedly, every business, big or small, faces challenges converting data into information or, even more importantly, actionable insights. The main reason for that is that data lives in one or more LOB (Line-of-Business) Applications, a variety of files on disk, email, or even paper documents. Depending on how you maintain your records, data integration, cleansing and curation are complex and expensive, particularly as the number of accounts grows. They often require professional help and know-how outside the budget of small companies. Data analysis becomes difficult when you’re dealing with unstructured data and, for that reason, keeping up-to-date and complete records is very important not just for having seamless processes but also for decision-making.

Benefits to Your Company

Here are some ways data analytics can benefit your company:

1. Identify top clients or payors with outstanding receivables records. This helps answer many questions. You don’t know where your money comes from? Do you want to pay special attention or send a gift basket to your 5-10% best customers for the holidays? Your data warehouse contains a wealth of client information. You can identify themes and trends, customer satisfaction or dissatisfaction, and more.

2. Assess payments at risk of default as well as map out demographics at risk. Your customer data can help you find out why your sales are collapsing and what is causing it. Some data tools can even help you perform AI tasks such as Sentiment Analytics on the feedback you receive from your clients. Addressing negative comments on your website could save your business.
3. Monitor the collection period for various receivables. If your collection period is 30 days, and a customer takes, on average, 25 days to pay, you have a pretty good system of collecting on your receivables. If, on the other hand, a customer takes 35 or more days, you must find a way to reduce that period. The Average Days Delinquent (ADD) metric can be used here.

4. Understand your AR turnover ratio fluctuations: Having a high AR turnover ratio is a good thing, but you don’t want it to go to any extremes due to the impact it may have on client payment behavior. Comparing various values over several quarters or years will help you determine when to change your debt collection methods.

For example: Dental surgeons often engage in intensive debt collection tactics because their balances are high and dental surgeries for the same customer are not so common. They do not have a massive fear of losing existing customers. Contrary to popular belief, a dental collection agency should ideally be instructed to engage in moderate or diplomatic collections since intensive techniques can tarnish the reputation of any medical practice, dental office even a small business. Intensive collection tactics also raise the probability of a counter lawsuit from debtors.

5. Evaluate how the length of delinquency and the value of those receivables you have to turn over to external collections affects your bottom line. Sometimes, you may want to keep a customer in spite of repeated delinquencies, but a few graphs showing several billing cycles may help you better understand if it’s worth keeping them.

6. Identify your strongest collection method. When money pours in, it’s easy to just enjoy it and not do the hard work of planning for the future. One glitch in your website’s payment capability, one employee who leaves, or conversely, the nicely worded ‘thanks’ message that accompanies emailed billing notices, or that month-long promotion, may make the difference between procrastinators or delinquent customers and on-time receipts.

7. Identify when your invoices are likely to be paid. Predictive modeling can offer insight into how you can proactively collect on invoices that are likely to become delinquent.

8. Rely on your cash-to-cash cycle. A successful business has a regular and predictable billing and collection system, where the cash-to-cash cycles are generally low. Data analysis can indicate where they remain low and where they tend to spike.

9. Assess and improve the efficiency of your referral network. If you have such a network, you can analyze which referral channel works best for your business. You can then optimize it or try to accumulate similar sources of referrals so you can increase your revenue.

Data Analytics Improves Data Integrity

These are only some ways data analysis can improve your business and contribute to your success. More and more internet and software providers offer tools to facilitate learning and using data analytics and visualizations. One of the major features of these tools is the automation of numerous processes. For instance, Microsoft Power Automate, allows business users with no coding experience to integrate MS Office products with other applications easily.

This allows emails upon arrival to be processed and stored in the LOB Application eliminating the need to do this by hand. Another use is sending automatic notifications internally or externally when specific events occur. Workflows can be implemented with little effort to eliminate manual tasks and improve data consistency and quality.

With data integrity, the data consistency across systems, resolved, a business can derive some actionable insights. With automation comes efficiency, predictability and reliability. When the time comes for an internal or external audit, you can count on your data to minimize risks and standardize successful workflows. All of these can drive your medical practice or small business forward, and help you save time and money down the line.

How Effective Are Collection Agencies?

Collecting outstanding debt isn’t an easy process. If a consumer has allowed their obligations to go into delinquency they’re usually either experiencing significant financial difficulty, they’re grossly irresponsible, or they have no intention of paying. None of these situations are amenable to fast debt recovery.

Companies will generally try to collect on their outstanding accounts internally before passing their most egregious cases on to an external debt collection agency. But how wise is this? Are collection agencies effective enough to warrant their fees?

Absolutely. Collection agencies are experts in debt recovery. The most effective agencies have perfected a proven process for their agents to follow that dramatically increases the chances of collecting a debt. Even after their contingency fees, a collection agency is typically able to recover a lot more money than the client can do by themself. Plus they take away all the troubles that your staff has to undergo while chasing your unpaid bills.

Not only should companies trust collection agencies to handle their debt recovery, but they should also pass the debt on to the agency sooner than they do in many cases. That’s because debt collection success is a factor of time, skill, and reputation, all of which favor collection agencies.

Collection Rates Drop As Debts Age

The longer an account remains delinquent, the less likely it is to be recoverable. An outstanding balance that’s one month old has a 94% chance of being collected. By two months that drops to 85%. It falls to 74% collectible at three months, and by six months, only 58% of debts remain viable. At a year, there’s only a 27% chance of recovering the debt.

These percentages assume skilled debt collectors with modern collection tools at their disposal, like those found at agencies. Internal collections departments fare even worse. It’s better not to wait too long to pass your outstanding debts on to a professional.

Collection Agencies Have Advanced Tools and Training

Debt collection is their business, after all. It’s how they make a living. This means collection agencies have just as much of an incentive to collect your debt as you do. It’s rare to find this sort of win-win relationship in business.

Agencies offer their agents rigorous training and access to advanced tools like skip tracing and bankruptcy scrub to improve the accuracy of their collections.

Skip tracing techniques allow agents to track down debtors that have “skipped” out on their debts and are no longer reachable. Bankruptcy scrubs alert agents when a bankruptcy filing occurs so they can move quickly to avail themselves of the proceedings as efficiently as possible.

These and other techniques aren’t always available to internal collections teams, reducing the effectiveness of their efforts.

Debtors Are More Likely to Pay A Collection Agency

When a debt passes from the original creditor to a collection agency, this escalation often makes debtors pay attention. There’s an implied threat when an agency gets involved that doesn’t exist with the original creditor. People that are having financial difficulties, or are just irresponsible will often string their creditor along. When a collection agency begins calling, the debt feels more palpable.

Collection agencies also know how to speak with debtors to motivate payment. That doesn’t mean they threaten them, because they generally don’t. Instead, they use a sophisticated arsenal of psychological tactics to push people toward payment.

As a third-party agent, they can have conversations with debtors that are difficult for the original creditors. They can act as an intermediary or position themselves as a helpful friend instead of an adversary. These are all benefits not afforded to the original creditor.

Collection Agencies Mitigate Legal Risks

Every state has laws governing how debts can be collected. Most creditors are unaware of these. And because they aren’t consistent, businesses that operate in multiple locations may have to follow different regulations depending on the customer.

Collection agencies are intimately familiar with all of these legal frameworks and operate within them daily. Using an agency can shield you from running afoul of these laws.

Collection Agencies Are The Most Effective Option

Quality agencies enjoy a higher success rate than original creditors, are more affordable than lawyers and legal proceedings, and use diplomatic techniques that allow companies to preserve their relationships with their customers.

You should undoubtedly attempt initial collection efforts, but once your delinquent accounts seem unrecoverable, you should trust a collection agency. Their fees might seem high, but keeping 70% of a debt you likely wouldn’t have collected otherwise is a net positive transaction. And if you don’t receive anything, the service costs you nothing. As stated earlier, it’s a win-win.

How Do I Send Debt to Collections?

At some point, nearly all businesses will face delinquent accounts. While it’s smart to initially attempt collection on your own, there’s only so much work you should do. Trying to collect a bad debt is draining on your time and your resources. Eventually, it makes sense to pass the task on to a professional debt collection company.

Need a Collection Agency easy to work with? Contact Us

High recovery rates and serving clients nationally

If you’re in this situation, you may be wondering how to proceed. If you’ve never sent debt to collections before, the process may seem daunting. But it doesn’t have to be. This article will give you the information you need to be successful.

Look For Collection Agencies With Relevant Experience

As you begin your search, keep in mind that not all collection agencies are equal. It’s helpful to find an agency with experience in your industry. They will be better prepared to handle the specific cases your business faces.

Agencies often specialize as well. If you’re a small business it’s better to locate a company that handles organizations of your size as opposed to one that focuses on midsized or larger companies.

The closer an agency’s experience aligns with your particulars, the more successful they’re likely to be with your accounts.

Balance Fees With Recovery Rates

Some agencies will charge a flat fee for their service, though most operate on a contingency basis. If they don’t collect anything on an account, the service doesn’t cost you anything. Otherwise, they keep a percentage of the original invoice amount, usually between 25% and 40%. Find out which scheme each agency you’re considering uses.

While it might be tempting to choose the agency that takes the smallest percentage, first ask them about their recovery rates within your industry. It’s worth paying more per collected invoice if the company you choose is likely to succeed with more of them.

Check The Agency’s Credentials

Most collection agencies work to maintain proper standards, but some are better than others. Ensure the ones you’re considering are properly licensed according to your state’s licensing rules and follow the guidelines of the Fair Debt Collection Practices Act.

Ask them for references and Google the company for online ratings and reviews. It’s also wise to check with the Better Business Bureau to see if their customers are satisfied with the service they received.

Ask Them About Security Protocols

When you send a debt to collections, you’re passing on sensitive customer information to a third party. It’s essential to make sure you aren’t putting your customers at risk.

Ask each agency to detail the security measures they use to guarantee your debtors’ data can’t be breached. If they can’t be specific about their security protocols or outsource their collection efforts to foreign countries you may want to consider working with someone else.

Some agencies offer a secure, online portal for submitting accounts and getting updates and performance reports on existing collections. This can be quite helpful, but the agency needs to offer assurances that the service is safe.

Ask About Their Collection Practices

Even though the agency is an independent company, your customer will likely tie their behavior to you. So make sure you’re comfortable with the way they handle collections. Good agencies can collect on debts without using aggressive or threatening tactics. Consider how you’d like your customers treated and then see if the agency your considering can work within those parameters.

Also, ask them if they have skiptracing capabilities. This technique leverages multiple cross-referenced databases to find debtors that have “skipped” town to avoid collection. It’s useful for maximizing collection success, so be sure it’s available.

Additional practices that to have at your disposal are credit reporting and legal collections.

Make Sure They Carry Adequate Insurance

If one of your customers feels they’ve been mistreated by the agency you hire to collect their debt, they can sue. The agency should have insurance against this. Otherwise, they may look to try and pass on some of those costs to you.

Read your contract carefully to see how you might be liable. In reality, you shouldn’t be liable at all, but an ounce of prevention is worth a pound of cure.

Once you’ve found a few agencies that tick all of the boxes above, consider a trial run. Give each a portion of your outstanding accounts. The one that nets you the highest total recovery in a given period could handle all of your collections from that point forward.