Debt Recovery

 

Concrete Pumping companies often run into overdue accounts receivable. Pumps, belts cost, fuel, staffing costs, and equipment maintenance cost a lot, therefore unpaid AR can hurt the finances of a pumping company dearly. These receivables are usually B2B accounts that require commercial debt collection.

A collection agency with its three-step collection process can assist businesses to recover money in an amicable manner. They can switch over to an intensive approach if required.

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Written Notices sent by a Collection Agency

The upfront cost for 5 Collection Demands is about $18 per account. Debtors pay directly to you, no other fees. Low-cost option. Good for accounts less than 120 days past due.

Collection Calls made by a Professional Debt Collector

Contingency fee only. No upfront or other fees. Agency gets paid a portion of the money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls a debtor many times. If everything fails, a possible Legal Suit if recommended by the attorney.

A trade receivable or an AR invoice is typically considered to be past due if any portion of the receivable balance is outstanding for more than 30 days.

Most Concrete Pumping companies do not require collateral for their accounts receivable; however, the Company may file statutory liens or take other appropriate legal action when necessary on construction projects in which collection problems arise. Typically, the company does not charge interest on past-due trade receivables.

The concrete pumping industry often gets bogged down in endless piles of paperwork. To minimize AR, the accounting staff should quickly process invoices without delay. This can be done by using good accounting software.

Confused between the Flat-fee Collection service and Contingency Collection service? Which one to choose?

Flat-fee is the most amicable way to recover debt, while Contingency collection is more intensive. We will point out the differences in a very easy-to-understand manner.

Flat Fee Collections (✉)	Contingency Collections  ( ☏ )
You buy a block of accounts from a collection agency, then keep using them over time. For example: If you think you would be sending collection notices to about 100 people over a period of 2 years, buy 100 accounts.	You do not buy anything in advance. No upfront cost is involved. Collection agency keeps a portion of what they recover. No recovery means no fees.
The amount charged by a collection agency is about $15 per account. Even if you have to recover an Amount Due of as low as $30 or as high as $100,000, the cost per account does not change. You pay a fixed fee of $15 per account. If you buy more accounts, the collection agency will lower your cost per account.	The average contingency fee is about 40%.  This means if a collection agency recovers $1000 from your debtor, then they will keep $400 and you will be given $600. You can negotiate a lower fee for higher amounts. For example, if your Amount Due on an account is $100,000 you can ask the collection agency to change only 20%. If your amount is between $10,000 to $100,000 you may ask them to charge 30%. For lower amounts, a contingency fee between 40% to 50% applies.
The debtor pays directly to you, not the collection agency.	The debtor is told to make payments to the collection agency. However, even if the debtor pays you directly, still you are legally bound to return the contingency fee portion to the collection agency.
Best for accounts less than 180 days past due.	Best for accounts over 180 days past due.
Five collection demands (letters) are sent to your debtor.	A human debt collector contacts your debtor multiple times, even offers a payment plan if necessary.
A cheaper way to recover money.	Costlier. However far better than recovering some money rather than writing off the entire amount as a loss.
Always better to start with the fixed fees step. You will save money. Transfer only those accounts for contingency collections that remain unpaid after fixed fee service.	Accounts that are complicated ( ex: foreclosure, disputed ) or those carrying balances over $10,000 should be directly assigned here. Or those over 180 days past due.
More amicable form of collections. Preserve your terms with the debtor.	More intensive than the fixed fee collections. Relations can still be saved, but chances are lower.
You can stop collection activity at any time.	The collection agency decides when to stop.
The next step is Contingency Collections if money is not recovered.	The next step is taking Legal action.
All accounts are skip traced to find the debtor’s latest address. Usually, the USPS change of address service is used.	Advanced skip tracing techniques are used.
For debtors who do not pick their phones, written demands will still reach them. (huge advantage)	If a debtor does not pick up their phone, your collection agency cannot do much. It is often a dead end, they may go credit reporting and that’s it.
Not all collection agencies offer this service.	Nearly all collection agencies offer this service

Need a collection agency that offers both services and can recover money all across USA? Contact us

Collecting unpaid accounts receivable is difficult. Whether you are collecting from a consumer of another business, you have multiple avenues to explore and multiple rules and regulations to follow. Sometimes, when all avenues have been exhausted, the only way to give yourself a chance of recovering the money you are owed is through legal action. Using an attorney to help in the debt collection process can be incredibly effective but also comes with its own challenges. Here is what you need to know about taking legal action to recover a debt.

• Nearly 20%-25% of all civil lawsuits are related to debt collection.
• Only about 25% of debtors attended their court hearing.
• 7 in 10 cases result in a default judgment because the debtor fails to show up in the court.
• With a court order, a debt collector can garnish wages, place liens on the property, and freeze bank accounts.
• Between 3 million to 5 million debt claims are filed in US courts.

The Power of Legal Action 

Unfortunately, when you are trying to collect on an unpaid invoice, sometimes your best efforts are not enough. Debt collection practices are governed by a certain set of rules and regulations which are meant to limit the amount and type of pressure a debt collector or a debt collection agency can put on a debtor. When these options fail to produce results, the next step is legal action.

Legal action can be an incredibly effective tool in debt collection. It creates intense pressure on a debtor who will not respond to other, less aggressive collection methods. These tools can range from an attorney simply sending recovery demands on law firm letterhead to taking legal action in the court, in front of a judge. An attorney can legal action to recover money owed.

When legal intervention is needed in the debt collection process, it is important that it is used in a way that keeps the most important goal in mind which is collecting the money owed. This is why it makes sense to let a debt collection agency handle any legal action you need to take on a debtor.

Why a Collection Agency Should Handle Legal Action 

The best reason to let a debt collection handle the legal process is that it is a lot cheaper and a lot less stressful to do so than when you do it yourself. Pursuing legal action with a debtor yourself means paying a lawyer or law firm astronomical fees to do this for you and taking time to meet and consult with lawyers and possibly even having to spend time giving depositions or in court.

When you work with a debt collection agency, legal action will be included as the final step of their process. They will have lawyers on staff or on retainer who specialize in this type of law and know exactly when and how to best escalate the legal pressure to achieve the ultimate goal of being paid in full. This will save you a lot of money, stress, and time.

The truth is, even if the issue goes to court and a court order is issued in your favor, many debtors will still not pay. This leaves creditors with no more options and they will be forced to eat the loss. When you allow a debt collection agency to work the legal system for you as a tool, not just as a last resort, they can work towards a settlement out of court and your chances of recovering what you are owed are much better.

The other thing you do when you outsource legal action to a debt collection agency is you separate the collections and legal process from your relationship with the client. Just because a customer goes into collections – even to the point of legal actions – doesn’t mean that they can never be a good client again. Even if that does not or cannot happen, using a third party to deal with the collection process can protect your business’s reputation and good name.

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Conclusion 

No one wants to end up in court for anything, let alone an unpaid debt. This is a big reason why legal action, or even the threat of legal action, is such a successful debt collection tool. To make sure you are using this tool in the most effective and efficient way possible, let a debt collection agency handle that part of the collection process.

If you operate an outdoor recreation facility such as a sports arena or theme park, a shift to subscription-based revenue models has introduced a new process to manage – collections. While recovering amounts owed to a company can present a challenge to any company, park-based businesses have an added tool for collections. As a provider of experiences, let your focus on relationships be an asset for improved collection results.  By remaining engaged with customers, your entire relationship improves, including when a bill is unpaid.

Collection Letters Service

Upfront cost for 5 Collection Letters is about $15 per account. Debtors pay directly to you, no other fees. Low cost option. Good for accounts less than 120 days past due.

Collection Calls Service

Contingency fee only. No upfront or other fees. Agency gets paid a portion of money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls debtor many times. If everything fails, a possible Legal Suit if recommended by the attorney.

How customers pay for experiences has changed

Theme park and outdoor sporting venues traditionally did not often experience collections issues with customers. The revenue stream was limited to individual transactions, such as a customer buying a ticket or paying for a concession item. Increasingly, today’s outdoor parks and venues think in terms of delivering customer experience through a monthly subscription service. Instead of a transaction, theme parks and other venues sell an ongoing relationship.

Moving to a subscription-based service introduces the need to monitor customer churn. Churn rate is a measurement of lost customers in subscription-based sales. If you’ve moved to subscription-based sales for any portion of your offerings, your collection efforts will more likely be targeted at reducing churn, not at collecting past due bills.

Reduce churn by providing persistent customer value

Companies experience the least amount of churn when they provide a customer experience that delivers enjoyment.

Delivering customer value keeps them engaged and repeat users, etc.

Can then conclude with some tips of how to keep customers engaged and also how to win them back if they’ve cancelled or let subscriptions lapse.

By the time 2020 began, the trend of people shopping more from their homes and less at brick and mortar establishments was already well on its way. With the social distancing measures, home quarantine, and global economic shift that hare happening as a result of the coronavirus this year, this trend has become not just a phenomenon but a necessity for many people around the world. Because of this, TV shopping channels and online websites have experienced booming growth but also face problems that come with prosperity. One thing these institutions will now have to deal with more than ever is unpaid consumer debt. This is why TV shopping channels and online websites need to work with the right collection agency.

Why TV Shopping Channel and Online Websites Need Collection Agencies

Every business wants to be paid on time and in full but that is not always the case, unfortunately. In retail businesses, like TV shopping channels and online websites, this can be a major problem, even more so than in other industries. These businesses depend on inventory and without the proper cash flow, inventory can become a problem. 

A debt collection agency will take a small percentage of the collected funds but that is a small price to pay for being able to recoup the outstanding accounts receivable faster and more completely than a TV shopping channel or online website would be able to do on their own. The time, money, and manpower it takes to effectively collect these outstanding bills can be just as expensive, if not more, than the debt itself.

Choosing the Right Collection Agency

For many TV shopping channels and online websites, there are multiple ways they do business. Some of these businesses are all consumer-facing or all business-to-business (B2B), but many deals with both. This is why you need a debt collection agency that knows the differences between these 2 types of debt collection and the best practices within each that are needed to succeed.

The other reason to use an experienced, ethical debt collection company is because of how important brand perception and reputation are to TV shopping channels and online websites. If bad PR gets out about shady, unethical, or over-aggressive debt collection practices, it can spell bigger trouble for your company than a few unpaid bills do. It is so important that your collection agency not only knows how to collect a debt but do it in a respectful way that complies with all federal, state, and local laws.

Conclusion

Right now, we are living in an incredible time and one that has presented incredible opportunities for non-traditional retail establishments like TV shopping channels and Online Websites. Due to these circumstances, it is more important than ever that these institutions keep a tight eye on their bottom line and use the right collection agency to do so. 

ISP organizations frequently turn to debt collection agencies to collect unpaid bills and other outstanding fees to help them. Beware, some collection agencies are less than reputable and can use shady or even downright illegal practices to collect what is owed to the ISP and cable company.

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Here is a story of one such instance that illustrates why ISP/cable companies must work with a reputable and ethical debt collection agency.

New York vs. A large ISP Provider 

In one well-known case that began in 2019 and continued in 2020, Congressman Anthony Brindisi (D-NY) was taking on the ISP and cable company for their debt collection practices. Brindisi has asked the U.S. Consumer Financial Protection Bureau to investigate the practices that have been used to collect consumer debt. This aggressive and non-transparent debt collection by a third-party debt collector had landed ISP in quite a bit of hot water.

An Ethical Debt Collection Company

In addition to getting their ISP and cable company clients in trouble, Credit Management also did a disservice to all debt collection agencies by using these tactics. They fed into many of the stereotypes of debt collection companies which are not true in many cases. When ISP and cable companies work with the right debt collection companies, they can recover money owed and get it in a way that will not damage their reputation or land them in trouble with Congress.

An ethical debt collection company will work hard and use all acceptable means to collect on a debt. Still, they will do so in a way that is respectful and honest to the consumer and protective of the ISP and cable company’s reputation. They will also have a deep knowledge of the Fair Debt Collection Practices Act and follow it to the letter to avoid getting themselves or their clients in legal or regulatory trouble.

A typical collection agency can accept overdue accounts of an ISP/cable provider for debt recovery which are no more than three years old.

These days, there are very few things that almost everyone uses. However, most people do have a relationship with an Internet Service Provider (ISP) and Cable Company. Even as more people cut the cord and move away from cable television, the internet and the companies that provide it have become even more important. Anyone who works from home or has any streaming entertainment service needs internet and the ISP company that provides it. Because these companies are so prevalent in so many people’s lives, it is no surprise that they run into many unpaid bills.

Collection Letters Service

The upfront cost for 5 Collection Letters is about $15 per account. Debtors pay directly to you, no other fees and a low-cost option. Good for accounts less than 120 days past due.

Collection Calls Service

Contingency fee only. No upfront or other fees. Agency gets paid a portion of money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls debtor many times. If everything fails, a possible Legal Suit if recommended by the attorney.

Common billing issues

Late Fees and Reconnection Fees: Customers can incur late fees if a payment is missed. In cases where service is disconnected due to non-payment, there might be a reconnection fee.

Data Overages: Some plans have data caps, and customers might be charged extra for exceeding those caps.

Cancellation Fees: Early termination fees are common in contracts if they decide to cancel the service before the end of the contract.

Conclusion 

This is a cautionary tale of why ISP and cable companies must work with a reputable, ethical debt collection company. The need for these companies is a reality in this business, and working with the wrong one can be very damaging.