Printing and advertising agencies are constantly dealing with overdue accounts receivable since their final invoice is usually raised after the work has been completed. To maintain positive cash flow, the advertising agencies must regularly review their past-due accounts and raise invoices promptly. Just a handful of clients can often accumulate a large number of unpaid bills if they have hired you for executing multiple projects at the same time.
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Advertising agencies are in a constant lookout for new customers. They face challenges of running a small business, increased competition, hiring & retaining the quality talent, the pressure to generate powerful ideas, to come up with customized pricing models, manage ongoing projects and adapt to the ever-changing digital technologies. While an advertising agency is busy managing all these pressures, it is quite possible that your in-house team is not able to keep a constant followup on past-due accounts.
The biggest hesitation which an advertising agency has when contacting a collection agency is the fear of losing customers. However, Collection Agencies are legally and strictly bound by laws, they must pursue debt collection in a diplomatic and non-abusive manner.
Collection letters sent by a collection agency are diplomatic in nature and are strategically sent out every 7 to 10 days. You can ask for a sample letter before they are sent out to your clients. This frequency of sending letters also ensures that payment demands will not miss the client’s payout cycle. Letters are an excellent tool to put a bit more pressure on your clients yet preserve the relationship with then. Collection letters service costs about $15 per account, includes 5 strategically crafted letters and is recommended after 60 to 90 days of non-payment. If you wait longer then chances of recovering your money fall significantly.
If a client has not paid even after sending the full cycle of collection letters, then it is certainly a good time to be ready to sever ties with them and go for intensive collections which includes Collection Calls and finally filing a Legal Suit through your collection agency.
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Collection agencies are experts in recovering money from past due accounts. They allow advertising business to focus on what they are best at while working as a low-cost extension to their own office.
Check this: Cost of hiring a collection agency