Printing and mailing services have been performing a crucial role in the American marketing industry. They run into overdue accounts receivable often, which can impact their business dearly. Maintaining a good business relationship with clients is as important as it is to recover money from unpaid bills. Unpaid bills can create severe cash flow for businesses. Once a bill is over 90 days past due, it must be sent for collections to prevent further losses.
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While almost every business has to deal with many of the same functions, each type of business goes about these functions in different ways. All businesses deal with things like sales, marketing, IT, finance, and more but, depending on your industry, the way you go about these aspects of business can be very different. The same applies to debt collection. The debt collection needs, rules, and regulations for printing and mailing service companies are unique to that specific industry and must be dealt with in certain ways. Here is what printing, signage and mailing service businesses need to know about debt collection.
Why Printers and Mailing Services Need Debt Collection
The truth is almost all businesses will face situations where clients don’t pay in a timely manner, don’t pay in full, or don’t pay at all. For huge corporations, these outstanding balances can simply be absorbed and become tax write-offs. For small and midsize businesses (SMBs) the importance of collections is much greater.
For the printing and mail service industry, it is not uncommon to run into outstanding accounts receivable. It is an industry where many regular customers are extended credit on large printing runs or are billed monthly for quarterly for regular direct mail campaigns. Because of these scenarios, nearly every business will run into a situation where a client does not pay from time to time.
Commercial vs. Consumer Debt Collection
Printing and mailing service companies almost always deal directly with businesses or with customers using their services for activities that are “commercial in nature”. This means that to collect debts, companies in the printing and mailing service industry are not beholden to consumer debt collection laws.
The Fair Debt Collection Practices Act (FDCPA) protects consumers from unfair and overly aggressive debt collection practices such as excessive contact, threats, and additional fees. This only applies to B2C debt collection, not B2B debt collection. Because printing and mailing service businesses are dealing with business and business-like entities, these businesses enjoy much more leeway in how they can go about debt collection.
Just Because You Can, Doesn’t Mean You Should
In some places, there is no law about texting while driving but that doesn’t make it any less safe or a better idea to do so. The same can be said about overly aggressive debt collection practices. While collecting a business debt you are allowed to call more often and at any time, make specific threats, and generally use most any tactic you can to get paid. While these practices may ultimately get the outstanding account paid, it may not be good for the long term health of your business.
Even though you are not bound by the FDCPA while collecting B2B debts, that doesn’t mean you shouldn’t abide by many of the tenets in that federal statute. It will help keep your good name as a business intact and maybe even allow you to keep a good customer even after having a payment issue. Some of the principles in the FDCPA to keep in mind are:
- Don’t call at unreasonable hours
- Don’t add unreasonable additional fees or interest that weren’t part of the original agreement
- Don’t broadcast the debt to the debtor’s customers or employees
- Lie about how much the debtor owes
- Don’t make false threats about suing or reporting the debtor or misrepresent yourself to intimidate the debtor
Let the Professionals Handle It
The best way for printing and mail services businesses to make sure they are walking the fine line between making sure they get paid while simultaneously taking advantage of the relaxed B2B debt collection laws and not going too far, is to use a professional, ethical, experienced debt collection agency to help collect past due accounts. Commercial debt collection agencies will know exactly how aggressive they can be and how much they can push to get the debt settled. They will also know how to do this in a way that separates the collection practices form the company and keep your business relationships and reputation in good standing.