With so many people moving across America, storage warehouses are in great demand. However, many customers do not pay their balance on time, leaving the storage unit’s rent overdue by many months. Most customers who do not pay their dues know that the value of goods inside the storage unit is not worth paying the accrued rent.
The staff of self-storage warehouses is not trained to go after delinquent customers professionally, nor do they have time or access to the tools needed to trace the person. Several complex legal laws are involved, even when you want to collect your own money. Consumer protection laws can be very tricky and vary by state. A single litigious can do sufficient damage to your business.
Auctioning the goods inside the unit is an option; however, it is tedious.
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The involvement of a collection agency changes the perception of your delinquent customers. They would rather pay to avoid all the collection hassles they will experience in the coming days. A collection agency can even report this unpaid debt on credit history, which can have severe implications for the consumer.
Sending low-cost written demands followed by collection calls under the name of a collection agency is the perfect way to make those unresponsive customers start paying. If that does not work, a series of collection calls by a professional debt collector is initiated.
Assigning an account to a collection agency when the customer is 90 days past due will substantially reduce your account receivables.
You should not hire a local collection agency, instead hire one which is licensed to collect bills nationwide. Many of your customers could have crossed state lines, and your local collection agency cannot pursue these accounts. Hiring a collection agency with a nationwide license is pretty much a requirement for storage and moving companies.
One of the most common issues is when customers delay their payments. To mitigate these problems, self-storage warehouses should have a well-defined credit policy, employ efficient tracking and billing systems, and engage in regular communication with customers regarding their accounts. It is also beneficial to periodically review accounts receivable practices and make necessary adjustments to minimize risk and improve cash flow.