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CPA/Accountants are very smart people, and they are the last people who need any financial advice, definitely not us.  However, debt collection is a completely different field. We have assisted several businesses and accounting firms to effectively recover money from their past due accounts.

Accountants face numerous professional challenges in their profession, which have risen significantly in the last ten years. Attracting new clients, technology adaption, data privacy issues, outsourcing work to low-cost countries, and free tax/accounting software services have also taken away a chunk of business from many small to medium-sized accounting firms. Additionally, accounting is a field where education is an ongoing affair in form of adapting to the changing taxation laws.

Serving Accounting Firms Nationwide Need an Accounting Collection Agency, or for your clients? Contact Us

Accounts receivable is an unwanted stress which comes along with the accounting profession. Without a systematic approach to your past-due accounts, these unpaid bills will quickly cut into your profit or even drive your firm towards a loss.

Attempting to use an in-house employee to collect from past due can take significant time of your staff who are definitely not experts in debt collection. Furthermore, it also deviates them from the core responsibility they have been hired for.

Collection agencies are experts in collecting a debt. Transferring accounts to a collection agency that have been past due for over 30-60 days will lead to significant savings for your business. Collection agencies through their Collection Letters and Collection Calls service can exert substantial pressure on debtors.

There is a huge difference when you send a demand yourself verses when a collection agency sends it. The involvement of a collection agency communicates a debtor that the process of collections may not just stop here, this case may be transferred to a debt collector, and eventually, the collection agency may file a legal suit as well. They may even report this debt to the credit bureaus, damaging the credit history of the debtor.

Check this page >> Cost of Collection Agency Services.

Typically collection agencies offer three types of service.
1. Collection Letters ( About $15 to $20 per account)
2. Collection Calls ( Contingency fees of about 40% )
3. Filing a legal suit ( Around 50%, but varies)

Summary of Collection Agency’s Services

Collection Letters Service

The upfront cost for 5 Collection Letters is about $15 per account. Debtors pay directly to you, no other fees. Low cost option. Good for accounts less than 120 days past due.

Collection Calls Service

Contingency fee only. No upfront or other fees. Agency gets paid a portion of the money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls the debtor many times. If everything fails, a possible Legal Suit if recommended by the attorney.

They also run “Change of Address/Skip tracing” and “Bankruptcy” scrubs for free on each account. Do not let your past due accounts impact your profit margins. Your own staff can never best the effectiveness and recovery rate of a collection agency. 

If you are looking for a good collection agency for accountants or CPA’s,  or for their clients, we can help you.

Is the amount recovered by your current collection agency below your expectation or below the standard recovery rate? It is time to hire a new one, a better one.

Need a better collection agency?  Contact us We have carefully shortlisted a few agencies based on their performance, pricing and experience of the management & staff. After you submit this form, we will promptly connect you to a good agency at no extra cost.

However, firing your existing agency, here are a few things that you should ask the “Support/Sales Representative” of your current collection agency to get a better understanding of the situation. You will get a decent idea of how flexible your agency is and if there has been a lapse on their part.

1. Does your agency provide accurate “Performance Reports”

Do they have an online collections portal on which you can see debt collection performance reports? If not, request them to email/mail you a performance report showing how successful their collection efforts have been. If the results have been unsatisfactory so far, then you have just succeeded in catching their much-needed attention, and now their collections manager will watch your accounts more closely for the next few days/weeks. Did your agency offer you any kind of collection guarantee, was it accomplished?

2. Is your current agency performing all the required “Scrubs”?

Do they perform a “Change of Address” scrub? Maybe the debtor has moved from the address you provided them but did the agency try to find his new address? Your debtor may have an honest intention to pay, but since he has relocated and did not receive your invoice at his new address, he forgot to pay. Scrubs may not be 100% accurate all the time, but your agency should perform them to improve the collection results. Are they additionally doing the Bankruptcy and Litigious debtor scrubs?

3. Did the Collection Agency representative explain all their products, and did they sell you the proper service?

Were you told when to use the collection letters service and/or the collection calls service? Collections letters service is best for debtors less than 120 days past due debt.

Examining their Collection Letters Service ( Fixed fees)

4. Check the collection letters verbiage

Ask for a few sample collection letters your agency has sent out to your debtors. Try switching from diplomatic to intensive verbiage. It’s possible that you may not satisfied with their demand letter’s verbiage at all.

5. How is the print quality of their Collection Letters?

Are they sending letters with very average print quality, which may look more like junk mail than a serious demand notice? Maybe next time, you should hire an agency that sends demands in colored print so that these collection demands have maximum impact.

6. Does your collection agency print the break-up charges?

Most agencies will total up all the charges and send them for collections. Although it is ok, but not 100% desirable. For example, if a patient visits the doctor twice and owes $200 for the first visit and $100 for the second visit. If those two charges are printed on a separate line, your debtor will understand his obligations better.

Examining their Collector Calls Service ( Contingency fees based)

7. Request for a few debt collector logs

Your Collection agency will not share call recordings with you, but they should be able to provide the activity/action log of at least a few of your accounts receivable. For example, ask the agency if they can provide how many times they have called upon two of your accounts with the highest outstanding balance. Were they able to talk to the debtor or not? How long did the call last?

8. What kind of payment options does your agency offer to the debtors

Does your current collection agency has the provision to allow debtors to pay in installments? Do they accept checks? Do they have a provision to accept online payment by credit card or Western Union?

9. Do you have a Settle in Full agreement in place?

An agency will try to collect 100% of the amount, but do tell your collection agency to settle accounts in a few cases where the debtor is ready to pay 80% of the amount but cannot pay the full 100% of the amount owed.

10. Will they do Credit Bureaus Reporting if you want?

Debtors often ask during a collections call, “If I do not pay, will you do a credit reporting” or “Would this reflect on my credit history?“. If the collection agency indeed does credit bureau reporting of unpaid debts, the collector would certainly reply, “Yes, we do, if requested by the creditor“. This reply puts additional pressure on the debtor. Per the debt collection laws, a debt collector cannot use Credit Reporting as a threat, but if asked by the debtor, a collector must convey the fact.

Could “You” be behind the low recovery rates?

11. Have you been submitting accounts on time?

It is recommended to use a collection agency after 60-90 days past due, at least for the Written Demands service. If you have submitted accounts more than one-year-old, then the probability of recovery on those accounts goes down even if a collection agency is involved. Expecting good collection rates on older accounts is an unreasonable expectation.

12. Have you been providing the backup documentation promptly when asked?

Your collection agency will often ask for backup documentation from you if the debtor disputes the amount owed. This documentation is his legal right. It may include “service receipts”, signed contracts and invoices. A collection agency cannot continue until you provide this information on time.

There could be one-off factors that we have not covered. For example, some of your large value debtors may have filed for bankruptcy, and that could be causing an overall lower recovery rate. Another scenario could be that many of your debtors are untraceable even after performing the Scrubs.

There is no guarantee that the results will be better with the next one if you change your existing collection agency. However, after discussion with your existing agency, if you conclude that they are indeed not up to the mark, then surely make a switch.

We have shortlisted a few good collection agencies. Want us to connect them with you?  Contact us.