Collection Agency: Home and Office Security Industry

The market size home and office security systems industry is expected to reach $84 billion by 2027. Nearly 50,000 businesses employ over 200,000 people in the Security Alarm Services industry. Johnson Controls and ADT have the largest market share.

The security industry, in particular, is facing ever-increasing challenges due to:

• Rapid changes in technology and up-gradation costs.
• Finding & retaining top talent and wage pressures.
• Cyber intrusions and security.
• Challenges related to newer technologies like the Internet of Things (IoT), AI, VoIP and Cloud-based adoption.
• Ever-changing privacy laws and compliance issues.
• Reducing the alarm signal transmissions and challenges to minimize false alarm incidents.
• Newcomers are rewriting the rules and further increasing competition.
• Bundling of services and demand for fewer but smarter cameras.
• Customers are getting less loyal and more price-savvy.

But the biggest issue faced by the security industry is the non-payment of bills by customers on time.

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A large number of past-due accounts receivable impacts the profit margins of security companies substantially, sometimes even restricting the cash flow required for day-to-day operations. Once an account is 90 days overdue, the likely hood of getting paid directly from the customer reduces drastically. It is recommended to transfer such accounts to a collection agency after 90 days of non-payment.

Collection Demands Service

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 the money they recover.  No recovery-No fees. Best suited for accounts over 120 days. A debt collector calls debtor many times. If everything fails, a possible Legal Suit if recommended by the attorney.

Most collections for home security fall under Individual/Consumer Collections, while office recoveries fall under Commercial Collections. Delinquent accounts restrict the ability to run a business as usual and, more importantly, take the focus away from acquiring new customers. The in-house staff of security companies is not professionally trained to handle debt collection, nor are they aware of federal laws involved in recovering unpaid bills. Making repetitive calls or sending invoices is a very demotivating and frustrating task for in-house employees.

A collection agency armed with their diplomatic collection demands and intensive collection calls attempts to collect debt professionally. The internal staff of security and alarm systems companies cannot beat their cost and effectiveness for recovering money.

Check here: Cost of hiring a collections agency