Debt Recovery

Businesses and medical professionals with overdue invoices regularly hire collection agencies to recover money for which their own efforts have been exhausted.

Businesses must find a reputable agency with experience in their particular industry or sector. Before hiring a collection agency, it’s crucial for businesses to do thorough research, read reviews, and possibly even seek recommendations from peers in the industry to ensure they’re partnering with an agency that will handle their collections professionally and ethically.

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A collection agency with good online reviews or high recovery rate endorsements from other businesses can give tremendous confidence to anyone looking to recover overdue bills. Not just that, there are collection agencies who proudly showcase thousands of 5-star reviews left by debtors who were so satisfied with their collections approach. Sounds unbelievable?  It’s true, because debt collectors may request positive reviews from debtors who have been assisted amicably and become debt-free.

While online reviews can provide a glimpse into other businesses’ experiences with a particular agency, it’s crucial to approach this process with care and diligence. Here’s a step-by-step guide on how to hire a collection agency with good online reviews:

1. Start with Research: Before you even look at reviews, make a list of agencies that specialize in your business niche or industry.
2. Read Multiple Review Platforms: Don’t rely on just one review platform. Check out several, including Google, Yelp, BBB (Better Business Bureau), and industry-specific sites.
3. Look Beyond the Star Rating: While a high star rating is encouraging, it’s important to read the content of the reviews. This will provide insight into common themes or issues.
4. Check for Response to Negative Reviews: A collection agency’s response (or lack thereof) to negative feedback can be telling. An agency that professionally and constructively addresses criticism might be more trustworthy than one that ignores or responds aggressively to negative comments.
5. Ask for References: Once you’ve shortlisted a few agencies based on online reviews, ask them for references. Directly talking to previous clients can provide deeper insights.
6. Look into Their Practices: It’s essential that the collection agency uses ethical methods. The last thing you want is for your brand’s reputation to suffer because an agency uses aggressive or unlawful tactics.
7. Check Licenses and Accreditations: Ensure the agency is licensed to operate in the state where your debtors are located. Membership in associations like ACA International can also be a positive sign.
8. Consider Their Reporting Capabilities: It’s essential to be updated on the agency’s efforts and success rate. Ensure they can provide regular reports on their activities.
9. Negotiate Fees and Contracts: There are different fee structures like fixed fees, contingency fees, etc. Ensure you understand and are comfortable with the terms before signing a contract.
10. Pilot Test: If possible, start with a smaller batch of accounts to gauge the agency’s effectiveness before handing over your entire portfolio of delinquent accounts.

Do you offer services like garage door installation, patio design and installation, door and window manufacturing, antique furniture refurbishing, appliance repair service, custom blinds,  basement remodeling, cabinet making and other home improvements?

Do you have unpaid bills from your customers and cannot recover yourself? A professional collection agency can recover your overdue invoices ethically and legally.

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Door and Window Services businesses, like other specialized industries, often have unique sets of Accounts Receivable (AR) and billing challenges. Here are some potential issues they might face:

1. Complex Billing: Installing or repairing doors and windows can involve multiple components and services, each of which needs to be itemized correctly on invoices. Complexity can arise from the various product types, customization, and additional services like inspection or maintenance.
2. Payment Terms: Some customers might negotiate longer payment terms, leading to longer AR cycles and potential cash flow issues for the business.
3. Project-Based Work: Given that many of these services might be project-based (e.g., a new building or a renovation), billing can be linked to project milestones. Delays in project completion can lead to delays in invoicing and, consequently, receiving payment.
4. Warranty Claims: If a door or window fails or doesn’t meet expectations within the warranty period, the service might have to handle replacements or repairs without additional revenue, and manage potential disputes that can delay payments.
5. Partial Payments: For larger projects, customers might make partial payments. Tracking these can be complex, especially if there are disagreements about work quality or project progress.
6. Customer Disputes: Billing disputes can arise from misunderstandings about the scope of work, the quality of installations, or the materials used. Resolving these disputes can delay payments.
7. Seasonality: The construction and renovation industry can be seasonal, especially in regions with distinct weather patterns. This seasonality can lead to peaks and troughs in cash flow, complicating AR management.
8. Variable Costs: Costs for materials like aluminum or other components can fluctuate based on global supply chains, tariffs, or other economic factors. If billing doesn’t accurately reflect these costs, the business might face thinning margins.
9. Regulatory and Compliance Issues: In some regions, aluminum door and window installations might be subject to building codes, safety regulations, or energy efficiency standards. Non-compliance can lead to rework, penalties, or billing disputes.
10. Manual Processes: Smaller businesses might still rely on manual billing processes, which can lead to errors, lost invoices, or delays.
11. Client Solvency: Especially in the case of B2B transactions, if a primary client (like a construction company) faces financial difficulties, it might delay or default on payments.

Foreign entities with accounts receivable from USA businesses can recover money by hiring an American collection agency.

Companies from Japan, China, Europe, Hong Kong, Canada, Mexico, Singapore and India can recover money from Americans with adequate supportive documentation. This includes exporters, importers, equipment manufacturers, technology companies, and medical collections.

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How does it work?

• Signed contracts and communication in the English language that proves that the debt is owed. That documentation should be valid in USA courts.
• Debt should ideally be more than 30,000 dollars.
• All documentation should be shared in advance so that the compliance officer of the collection agency can evaluate if the collection is advisable.
• In cases where the compliance officer concludes that the case should be directly handled by an attorney ( rather than a commercial debt collector), the client must bear the court filing fee.
• Fee: All collection charges are contingency-based (It means the collection agency or the lawyer makes nothing unless they collect for you, they only keep a percentage of the amount collected). Contingency fee ranges from 25% to 50% depending on the complexity, age and balance of the debt.
• Not mandatory, but we prefer you to have a USA bank account so that the recovered funds can be transmitted to you electronically. The collection agency will deduct the wire transfer fee if money is sent internationally to your bank account.
• Not mandatory, but we prefer that you have a USA-based contact (your business associate, even an authorized friend) whom we can contact in case additional backup documents are needed or we need to discuss something related to the debt.

Collection activity is a slow and effective process. Trust your collection agency partner and never hide details pertaining to the case. Since they work on a contingency-based fee, there is nothing to lose.

What about debtors outside USA

Most USA-based collection agencies will not collect from foreign debtors or international businesses, because USA has some of the most regulated consumer protection laws compared to the rest of the world. The reasons include the following:

• Biggest legal challenge: Since contracts are generally signed in USA with a USA-based entity, but their debtor lives in a foreign country like the European Union, it can be tricky. To be safe, all collection agencies involved (domestic and international) should ideally be 100% compliant with both countries’ collection and data security laws (say USA and the European Union).

•  Keeping up with a host of USA collection laws (FDCPA, GLBA, FCRA, TCPA etc..) is quite a task as all 50 states act like 50 countries ( separate collection laws and time zones). Laws in California are different from New York. Laws of New work are different from those in Nevada and Texas. Etc.

• US collection agencies strive to maximize collection rates for their clients ( with US debtors). Timezone can be another challenge if international collections are initiated from United States.

• Most international collection agencies have their coverage in USA (and sometimes in Canada). For debt recovery in other countries, they tie up with local agencies, agents, and lawyers. Technically, they are not licensed to work themself,  so they outsource collections. We feel this is very risky.

For example, the latest law, “the GLBA” data security law, requires collection agencies to be approximately as secure as banks. Foreign countries do not locally enforce this law. This leaves US creditors at a great risk, each time they transmit patient data that will eventually flow to a foreign country. The foreign collection agent/lawyer may not follow GLBA, HIPAA and FDCPA laws. What if the foreign debtor hires a USA-based attorney and tries to sue the provider? Not sure how things change by each country. So a domestic collection agency generally opts to handle debtors in the USA only (that we understand very well), without using foreign entities.

• A better approach is to try to collect from the USA person/citizen who acted as a guarantor/cosigner of their foreign debtors/patients. Use Kinum Step 3 / Kinum Legal approach in such cases.

Have you made excessive employee payments and are finding it hard to recover these payroll over-payments? An experienced collection agency can recover your unreturned equipment, laptops and excessive money paid from your ex-employees and contractors who are not responding to your efforts to get your money back.

Fact: When your ex-employee or contractor realizes that a professional debt collector is now doing collections, they instantly become more fearful, a lot compromising, and dig deeper into their pockets to resolve the matter. A collection agency can put adequate pressure, impact their credit score, make persistent calls for months and even take them to court to recover your money.

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Overpayment of wages can occur for various reasons. Some of these are unintentional, resulting from administrative errors or misunderstandings, while others can be intentional as a result of fraud or other improper activities. Here are some common reasons for the overpayment of wages:

1. Clerical Errors: Mistakes in data entry, miscalculation, or misinterpretation of wage rates can result in an employee receiving more than what’s due.
2. Misunderstanding Work Hours: If an employee’s hours are not properly recorded or are misinterpreted, they could be overpaid. For instance, failing to account for breaks or wrongly inputting overtime hours.
3. Duplication: Payroll might process the same payment more than once due to a system glitch or human error.
4. Retroactive Pay Increases: If a pay raise is given retroactively and not calculated correctly, it can result in overpayment.
5. Failure to Account for Absences: If an employee takes unpaid leave or has other deductions but they are not factored into the pay, it could result in overpayment.
6. Incorrect Tax or Other Deductions: Mistakes in withholding or not accounting for certain deductions can alter the net pay.
7. Advance Payments Not Deducted: If employees receive advances on their wages, but these advances are not properly deducted from subsequent paychecks, this can result in overpayment.
8. Termination Discrepancies: When an employee leaves a company, ensuring they’re paid for only the time they worked can be a complex process. Missteps can result in overpayment.
9. Benefits Miscalculations: Overestimating the cash equivalent of benefits can result in an overpayment.
10. Commission and Bonus Errors: Misunderstandings or miscalculations related to performance-based earnings can result in overpayments.
11. Lack of Proper Oversight: Without regular audits or checks on the payroll system, overpayments can go unnoticed for extended periods.
12. Fraudulent Activities: Though less common, intentional actions by an employee or a group of employees, like clocking in for someone else (buddy punching) or manipulating the payroll system, can lead to overpayments.
13. System Migration or Upgrades: Switching to a new payroll system or software can sometimes lead to glitches that cause overpayment.
14. Lag in Implementing Changes: Delays in updating employee records after a salary reduction, demotion, or change in hours can lead to overpayment.
15. Poor Communication: Miscommunication between departments (e.g., HR and payroll) can result in inconsistencies in pay.

If overpayments do occur, it’s crucial to address them promptly and transparently, keeping in mind the legal and ethical considerations involved.

The electric vehicle industry is gradually gaining widespread acceptability. Like any other auto industry, they experience aging accounts receivable that require professional debt collections. For EV companies, the biggest concern is their reputation as they cannot afford to have bad reviews as a part of the debt recovery process. They need a collection agency that can deliver good recovery rates by following a diplomatic approach rather than an intensive approach.

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For Electric Vehicle (EV) companies, accounts receivables might arise from various scenarios, including

1. Sales of Vehicles: When an EV company sells vehicles to distributors, fleet customers, or even individual customers on credit terms, it will recognize the sale as revenue and record the amount owed by the customer as an accounts receivable.
2. Service and Maintenance: If the EV company also provides post-sale services and maintenance, and if these services are invoiced to be paid at a later date, then they would result in accounts receivables.
3. Licensing Technology or Software: Many modern EVs come with advanced software systems, and if an EV company licenses its software to other parties with payment to be made later, it would create accounts receivables.
4. Selling Spare Parts and Accessories: Sale of spare parts, accessories, or even charging equipment on credit will result in accounts receivables.
5. Grants and Incentives: In some cases, governments or institutions might pledge grants, incentives, or rebates to EV companies, but the actual payment might be received later, leading to accounts receivables.
6. Leasing Programs: If the EV company has a leasing program where customers can lease vehicles and make periodic payments, any overdue payments or payments expected shortly would be considered as accounts receivables.

Electric Vehicle (EV) charging station companies accounts receivables can arise from:

1. Charging Services: If a charging station company provides charging services to customers who pay later, perhaps on a monthly basis or on a postpaid plan, then the money owed by these customers would be categorized under accounts receivables.
2. Infrastructure Setup for Third Parties: Some charging station companies set up charging infrastructure for third parties, like corporations, municipalities, or real estate firms. If these third parties have been provided with payment terms that allow for delay, the amount owed would be an accounts receivable.
3. Subscription or Membership Fees: Some EV charging companies might operate on a subscription or membership model where customers pay periodically to get certain benefits or rates. If there are dues from such subscribers or members, these would be classified as accounts receivables.
4. Sale of Charging Equipment: If the company sells charging hardware to other businesses or consumers and offers credit terms, then the amount owed for these sales would be recorded as accounts receivables.
5. Maintenance and Support Services: Post-sale, a charging station company might provide maintenance, support, or software update services. If invoiced amounts for such services are to be paid at a later date, they would result in accounts receivables.
6. Grants and Incentives: Similar to EV manufacturers, charging station companies might also be eligible for certain government grants, incentives, or rebates. If these are pledged but not paid immediately, they would lead to accounts receivables.
7. Advertising and Branding: Some charging stations might display advertising or offer branding opportunities to other businesses. If the advertisers or businesses are provided credit terms for their payments, the amounts due would be considered as accounts receivables.

Boat repair and rental services often face various accounts receivable issues that can challenge profitability, efficiency, and customer satisfaction. Unpaid bills can be forwarded to a collection agency that can recover money in an amicable and legally compliant manner.

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Common billing issues that marine companies face

1. Fluctuating Part Prices: The prices of boat parts can fluctuate based on availability, demand, and other factors. If a business provides a quote based on an old parts price, but then buys the part at a higher rate, it can impact profitability.
2. Delayed Invoices: Failing to send out invoices in a timely manner can lead to cash flow problems. Customers might also be caught off-guard if they receive an invoice much later than expected.
3. Inaccurate Billing: This can result from human error, like miscounting hours worked, mispricing parts, or charging for services that weren’t rendered.
4. Rental Time Disputes: Customers might dispute how long they’ve rented a boat. For instance, if a customer returns a boat 30 minutes late and is charged an extra hour, it could lead to disputes.
5. Damage Assessments: Determining damage charges can be subjective. Customers might dispute being charged for damages they believe were pre-existing or argue about the cost of repairs.
6. Lost or Unreturned Equipment: For boat rentals that come with additional equipment (like life jackets, fishing gear, etc.), there can be issues when items aren’t returned or are returned damaged.
7. Seasonal Variability: The boat repair and rental business can be highly seasonal, especially in certain geographic areas. Managing billing during peak seasons, when there’s a high volume of transactions, can be challenging.
8. Cancellation Fees: Customers might dispute or refuse to pay cancellation fees .
9. Payment Methods: Limited payment methods can deter customers or complicate the billing process. In today’s digital age, businesses are expected to accept various payment methods, from credit cards to digital wallets.
10. Deposit Disputes: Many boat rental services require a deposit. There can be disputes regarding the return of these deposits, especially if there are damages or if the boat is returned late.
11. Taxes and Regulations: Depending on the jurisdiction, there might be specific taxes associated with boat rentals or repair services. Ensuring accurate collection and remittance of these taxes is crucial.
12. Maintenance vs. Repair: Sometimes, what one person views as general maintenance, another might view as a repair. Clearly defining and billing for these different services is essential to avoid misunderstandings.

To address these billing issues, boat repair and rental businesses often employ modern billing software tailored to their industry, have clear terms and conditions, and provide thorough documentation and communication with their customers.