Plumbers and private contractors run into business issues all the time. However, getting paid on time for the work done is probably the biggest challenge. Plumbers often need a Line of Credit to function.
Contractors who take plumbing assignments for commercial businesses face a different set of issues versus those dealing in residential projects. Ongoing business challenges include – Increased competition from low priced competitors, maintaining profit margins, hiring talented staff, negotiating retention, and coping up with sudden material price increases.
Not only is finding skilled labor is hard in USA, but the experienced staff is also getting more expensive. When stepping into a home, you never know whether this owner will eventually turn out to be a good customer or not once the job finalized.
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Cost of insurance, going through one-way contracts and sometimes writing the job info multiple times takes time. Moreover, fixing dripping faucets, low water pressure, running toilets, leaky pipes and clogged drains is not all that exciting anyway. Working day-in and day-out, contractors do not have much time and energy left to chase after their unpaid bills and overdue accounts receivable.
If a customer has not paid you in full even after 30-60 days since the job was completed, what can you do? Not much other than making a few reminder phone calls. To minimize your accounts receivable, let an experienced collection agency handle your past-due accounts, that is what they are expert at and do pretty much all day long.
A collection agency can settle these past due accounts by making your invoice a priority while using respect and diplomacy to maintain strong customer relations. Submitting accounts to a good collection agency on time will improve your cash flow and maximizes the chances that your small business gets paid-in-full for the work done.
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For accounts older than 120 days, and those who have not paid even after receiving collection demands, the probability of an amicable solution decreases.
First two steps are flat fees services. They are a great deal if the debt is less than 120 days old and cost between $15 to $20 per customer.
3. If all amicable efforts fail, then a debt collector will get on the call with your client and try to recover the debt. This service is contingency-based, which means an agency will give you back about 60% of the amount collected and keep 40% as their service fees. Do not fall for collection agencies offering very low contingency rates as their recovery rates will likely be lower.
Check this page >> Cost of Hiring a Collection Agency
If you are looking for a good collection agency, we can help you. Contact us if you are interested in finding out more.