Printing and advertising agencies are constantly dealing with accounts receivable since their final invoice is usually raised after the work has been completed. To maintain a positive cash flow, the advertising agencies must regularly review their past due accounts and raise invoices promptly. Just a handful clients can often accumulate large number of accounts receivable if they have hired you for executing multiple projects at the same time.
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, pressure to generate powerful ideas, come up with pricing models, manage ongoing projects and adapt to the ever changing digital technologies. While busy managing all these pressures, it is quite possible that your team is not able to do 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 to 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 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 lowers 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 severe 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
Contact us if you are looking for a collection agency with experience in your industry.