The market size home and office security systems industry is expected to reach $75 billion by 2023. 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 the introduction of 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.
A large number of past-due accounts receivable impacts their profit margins of security companies substantially, sometimes even restricting the cash flow required for day-to-day operations. Once an account is 90 days over-due, 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.
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Most collections for home security fall under Individual/Consumer Collections, while office recoveries fall under the Commercial Collections. Delinquent accounts not only restrict the ability to run a business as usual but, more importantly, takes the focus away from acquiring new customers. The in-house staff of security companies is not professionally trained to handle debt collection, nor they are aware of federal laws involved in the process of 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 in a very professional manner. 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