But lets accept, accountants do face numerous professional challenges which have risen significantly in the last decade. Attracting new clients, technology adaption, data privacy issues, outsourcing and free tax/accounting softwares have also taken away a chunk of business from many small to medium sized practices. Additionally, accounting is a field where education is an ongoing affair in form of adapting to the changing taxation and laws.
Amid all this, an improper account receivable management approach can lead your firm towards a loss. Handling past due accounts in-house can take significant time of your staff whose are definitely not experts in debt collection, but it also deviates them from the core responsibility they have been hired for. Collection agencies are experts in collecting debt. Outsourcing these accounts to a collection agency will lead to significant savings. Collection agencies through their demand letters service and collection calls are able to exert significant pressure on debtors. There is a huge difference when you send a demand letter yourself verses when a collection agency sends it. Involvement of a collection agency communicates a debtor that the process of collections may not just stop here, his case may be transferred to a debt collector and eventually the agency may file a legal suit as well. Furthermore a collection agency may even report the debt to credit bureaus resulting in a negative entry on his credit history.
Check this page >> Cost of Hiring a Debt Collections Agency
Typically collection agencies offer three types of service.
1. Collection Letters ( About $15 to $20 per account)
2. Collection Calls ( Contingency fees of about 40% )
3. Filing a legal suit ( Around 40%, but varies)
They also run “Change of Address” and “Bankruptcy” scrub for free on each account. Do not let your past due accounts impact the profit margins of your business.
If you are looking for a good collection agency, we can help you. Contact us if you are interested in finding out more.