Vineyard owners regularly face problems with outstanding accounts receivable from clients, contractors, and suppliers. Smooth cash flow is critical for your winery’s ongoing operations and expansion.
Collection agencies classify the debt as “Commercial Debt” or “Consumer Debt“.
Commercial Debt (B2B): The debtor is a business (not an individual). Collection balances are higher, and settlement is attempted so that the business relations of the two parties are not damaged. Before starting the commercial collection process, a collection agency will give you a final fee quotation after studying the complexity of your case. Agency collection fees vary from 15% to as high as 50%.
Consumer Debt (B2C): In this case, the debtor is an individual. Collection agencies can provide cheaper flat fee services in the form of diplomatic “Collection Letters“. A 40% contingency fee is charged if the account is transferred to a “Debt Collector” who makes Collection Calls to your debtor.
From the debt collection point of view, commercial and individual accounts are treated very differently. The federal and state debt collection laws are also drastically different for each of them.
The last resort of collections is to file a Legal Suit.
Top wine-producing regions in US are – Lodi, Napa, Paso Robles, Sonoma Valley, Palisade in California , Snake River Valley in Idaho, Willamette Valley in Oregon, Albuquerque in New Mexico, Finger Lakes, North Fork and Long Island in New York, Fredericksburg in Texas and Leesburg in Virginia
It is recommended that a winery should transfer the debt to a collection agency once it is about 90 days past due. Faster you transfer a past due account to a collection agency, the chances of an amicable settlement are higher.
Do not burden your untrained winery staff with engaging in debt collections. Collection agencies are experts in collecting money. While you focus on the daily running and expansion of your winery, let the collection agency handle your accounts receivable in a legally-complaint manner.
If you need a collections agency to recover money from past due accounts: Contact us
The same is true for beer and spirits producers.