Five Debt Collection Tips to Recover Outstanding Debt Quickly

Outstanding debt can be a major deal breaker, especially, if you are the owner of a business. No matter what your profession you are in, outstanding debt can wreck your accounts as quickly as they can set them right. For this very reason, it’s equally important to be able to recover outstanding debt quickly, in order to ensure payments remain current at all times.

Here are five debt collection tips to recover outstanding debt quickly.
1) Call weekly on pending accounts: Customer accounts beyond 30 days past due need to be called on every week. This way, when your debtors know they owe you money, it becomes easier to have them pay up. People who keep waiting for time to lapse might often end up waiting more than their due share of time.

2) Demand 100% payment clearance: When someone owes you money, you have to get right down to business. For this very reason, when you contact your debtors, you should ask them to clear all the pending dues. This way, you might be able to recover a part of the money in a stipulated time period. Every time you call them, make sure you ask them to clear 100% of their dues, to minimalize pending dues.

3) Offer payment plans: Many companies often go ahead and offer easy payment plans to customers. For example, you can break down the pending amount into 6 equal installments and charge an interest rate on the outstanding debt, in order to make it convenient for your debtors to pay up on a monthly basis. This way, even the debtors are happy, and you can rest assured you would also be able to recover a little more than just your outstanding money.

4) Employ debt collection agencies to do your bidding: If you have some stubborn debtors, then you can even employ debt collectors to do your bidding. This way, you can be sure of being able to recover 80-85% of your pending dues in the shortest period of time. Debt collection agencies have their own strategies to collect money from customers who are refusing to clear the pending dues.

5) Go legal on your debtors: When nothing seems to work, the court of law comes to your rescue. File a case against your debtors, in case you have tried and tested all possible avenues of collecting money on your accounts. However, keep this as an option of last resort, since you might have to end up paying more than what is owed to you, in the form of legal fee, lawyer fee etc. This is a decision which should be taken keeping in mind the pending amount, the people involved and the total cost of recovery.

These were some of the debt collection tips to recover outstanding debt quickly. They should be implemented in the order they appear, to ensure minimal over expenditure, when it comes to collecting money on your pending accounts.

Customers Won’t Pay? How to Choose a Collection Agency

Some customers, especially the ones who default, can be extremely stubborn at times. No matter how much you call them, mail them or text them, chances are your efforts will all go waste. But does this mean, you need to write the pending dues as bad debts? No, it does not need to be like that. Since every penny counts, there are always ways and means to collect money on outstanding accounts. When faced with such scenarios, the best way out is to partner with 3rd party collection agencies. Collection agencies are focused on recovering past due bad debts, which are pending from a long period of time. Such agencies have trained staff, which is well qualified to extract and collect money from stubborn customers, who are refusing to clear their pending dues. Despite all methods, if the customers still refuse to clear the outstanding debt, then such debt collection agencies resort to legal action against the customers, in order to collect as much money as possible. For this very reason, it’s very important to know how to choose the right collections agency, so that your business can recover as much money as possible from defaulting customers. Here are some tips which might help you in choosing the right collection agency to do your bidding. Currently, there are more than 5000 debt collection agencies in US itself. Some of these agencies specialize in collecting from individual customers, while others are focused on collecting from businesses and companies alike. There are some collection agencies which handle both types of collections as well.
  • Ask for referrals from people/companies: Most of the times, you will come across attorneys, individuals as well as businesses which are sailing in a similar boat as yours. In such scenarios, you can go ahead and ask for referrals from such people, who might already be using the services of such agencies for their own collection purposes.
  • Check online reviews: While word of mouth is a strong source of tracking down a good agency, any extra research will not hurt anyone. Before hiring an agency, it’s important to check the agency’s reviews online, in order to eliminate any bad choices.
  • Check for state licenses: Every agency will not be state licensed, which means it can’t collect money from any business/individual customers. This can translate into more problems with you, since it would fall under the illegal transactions purview.
  • Visit the agency: If possible, try and visit the agency you have shortlisted. This way, you might be able to get a fair idea on how the different collection representatives are taking calls and collecting money from their existing customers. If the environment and collection procedures appeal to you, you can choose accordingly.
  • Don’t base judgments on size: Don’t base your decisions on size. If a collection agency is big, it will not automatically become one of the best in the market. Even smaller agencies might be able to do wonders with your customers.
These are some of the key points which can help you take the right decision while choosing a good collections agency. In order to take the right decision, you have to do some research before zeroing in on an agency which fits your requirements.  

Five Tips for Hiring a Debt Recovery or Debt Collection Agency

In order to deal with stubborn defaulting customers, you have to hire debt recovery agencies to do your firm’s bidding. With this said and done, it’s important to keep in mind that the right steps are taken to onboard the most appropriate debt collection agencies, so that your business does not take a negative hit in the long run. Here are some steps you can undertake to ensure you hire the right debt recovery agency for your business.
  • Do proper research: Research is key, especially when you want to hire the right debt recovery agency. During the research stage, you can check the agency’s debt collection process, so that there are no loopholes in the future. Once you are satisfied with their ways and means of collecting money, you can rest assured the agency would collect money in the right manner from your customers.
  • Ask yourself, “Is the agency legitimate?”: If you are hiring an illegitimate agency for your company’s collection process, then you might get into legal implications later on. This might mean that you end up on wrong side of the law, as your customers’ might sue your business for harassment. Make sure the agency you hire is legally handling the collections process.
  • Check with the agency if they use “Skip Tracing”: Debtors often tend to run away, when they are faced with the challenges of owning up to their debts. In such cases, good collection agencies own several databases, which help them track people who are on the run. This way, your business can have a sure shot way of being able to recover money from all types of errant customers.
  • Insurance goes a long way: Collection agencies use a series of methods to collect money. Sometimes, these methods might come across as crude, which might make the debtors feel as if the collection agency acted in bad faith. In such circumstances, the customers can sue the collection agency as well as the business getting the money collected. In order to avoid such situations, you should ask the debt collection agency to provide insurance, which can help you steer away from any potential law suits.
  • Take fees and contingency costs into consideration: Once you have zeroed down on a few agencies which fit the bill, you need to compare costs and see which agency is offering the most economical services. There might be different types of costs which can be included in the list of services. In order to arrive at the right costs, make sure you pre-empt any possible contingencies which might arise during the collection process. This way you would not have any untoward surprises in the future.
Post the hiring phase, you need to remember that you would never get the full collection amount from the agencies. For this very reason, it’s important to highlight that your business should exhaust all possible sources of collections, before hiring a debt collection agency to do your bidding.  

Credit Limits Setting Process

Setting limits is an art and not a science; but for this very reason, it is necessary to be able to use proper judgment when it comes to granting credit and letting customers into your business. Credit limits gauge the maximum limits a company can go to when it comes to offering credit based policies to their customers. This way, they can charge/purchase first and pay later. However, the risk of losing payments is always at the fore, due to which it is extremely important to be able to take the right decisions during the screening process. What do you need to consider before setting limits? The first and foremost thing which needs to be considered is a company’s self exposure and the appetite for risk. This way, a company can understand if it has a “Liberal or a Conservative policy”. Also, another thing which a company needs to figure out is the working capital requirements, which it can invest in its customers. Methods of setting limits
  • Trade references and background checks: Once you have the trade references in place, it becomes easier to perform a series of background checks. This way, one can compare between the high credits, average credits and low credits awarded to the customers.
  • Credit Limits setting process: Bank references can go a long way in helping you set limits for your customers. By doing so, you would be able to figure out the right amounts of limits which need to be set on your customers. If these customers have an unsecured line of credit with the bank, you can safely set up higher limits for them with your company. Either way, you can decide the best course of action for your customers.
  • Agency reports: Credit agencies often give information related to payment performance and the ratings of the customers. Under the payment performance category, there is a section which lists down the paying habits of their customers. These reports often give a true picture of the paying capacity of each customer, under different sections, which make the reports extremely valuable and trustworthy.
  • Financial statements: Another document which can be used to make judgments on the credit lines is the customers’ financial statements. They can go a long way in helping you understand the financial situation of your customers, their sources of income, expenditures, profits and losses. If a person/company is raking in good profits regularly, they would have no problem in paying their bills on time. However, if a person/company is constantly incurring losses, it would be best to avoid giving them any line of credit, irrespective of the amount.
  • Physical verification: Sometimes, client’s physical location can also be verified to ensure they will not run off post making any charges on their account. This ensures utmost safety for the credit assignor, thereby giving some peace of mind and security at the time of granting credit.
 These were some of the ways in which sound decisions can be made with respect to setting credit limits. At the time of analysis, it’s imperative to take well planned and carefully analyzed decisions, so that your company does not go into losses or on board customers who will default at later stages of payment. Make wise decisions and see your business flourish immensely.

Pros and Cons of Account Receivables process outsourcing

As a small business owner, you probably have a lot of expenses to meet. For this very reason, outsourcing would appear to be a very lucrative option, when it comes to saving costs and increasing efficiency. At the same time, you would probably also know that it is quite hard to get working capital to meet your daily business expenditures. During times of shortage, it becomes very necessary for businesses to outsource their accounts receivables, so that businesses obtain efficiency and cost saving benefits for their business operations. Here are some of the pros and cons of business outsourcing, which can shed some light on why it’s important to outsource account receivables. The pros:
  • Cut Costs: Why does any business want to outsource their operations? Simple reason is, to cut costs. Hiring your own in house accounting staff, purchasing the equipment as well as maintaining everything in the right order can be a costly task, one which any business would want to avoid. By outsourcing, your business can benefit immensely by doing the job at a much lower cost.
  • Efficiency: Efficiency can be greatly enhanced, as soon as the work is outsourced. The same work, which might be done manually, can be automated and experienced staff can be hired at lower costs, to enhance efficiency.
  • Round the clock coverage: Many businesses have round the clock service requirements. Outsourcing is often considered to be a great tool, especially, when it can provide massive round the clock coverage to small businesses and companies alike.
  • Automated tracking: Even though the work is being done offsite, there are a lot of ways and means to track the work being completed. Modern technology allows everyone to stay on top of the completed work and keep an extensive track of what’s completed and what’s pending.
  • Error reduction: Every outsourced business has elaborate quality checks in place to ensure maximum quality control for the clients. This way, top notch quality can be maintained, without having to worry too much about errors and wrong information handling.
Cons: Since every coin has 2 sides, even outsourcing has its own cons. Here’s a list of the negatives of outsourcing account receivables to other parties.
  • Loss of control: When work is outsourced, there is always a degree of loss of control for the client. Since the work is usually going offsite, there is no direct supervision of the client on the work being done, which can often result in a loss of control.
  • Dependency: Even though cutting costs is the main agenda, there is often a dependency which develops over a period of time. This dependency could mean that you are waiting for work to get delivered, or waiting for things to be completed, etc.
  • Cost of getting work done: Despite outsourcing, there are often a lot of hidden costs which are not considered during the initial planning phase. These costs would come to the fore when the work is outsourced. These costs can often end up as added burdens instead of reducing the costs for the company.
Keeping all the above points in mind, it’s becomes clear why accounts receivable outsourcing is of prime most importance for businesses and companies alike.

Debt Collection Strategies

Collecting debts is not a child’s game; it needs patience, and due diligence, which can go a long way in being able to collect effectively and efficiently. Some of the best debt collection agencies have honed their skills over the years, thereby making their strategies fool proof and satisfactory. For this very reason, it is imperative to understand some of the best possible collection strategies in the market, which can go a long way in helping individual and companies collect their outstanding dues from customers’ and businesses alike. Here is a list of strategies which can help make collection more effective:
  • Regular reminder calls/mails: Many a times, customers might not be aware that their payments are due. In order to maintain a good customer service, it’s imperative to have a system which monitors and makes regular reminder calls and sends regular mails to customers with outstanding payments. This way, customers can be kept on track, when it comes to achieving payments on time.
  • First demand/second demand notices: If the customers continue to ignore the payment reminders even after the reminder calls and mails, then you can start with your internal collection calls, wherein customers will be asked to pay the pending dues. In case of first level escalation, the idea is to be a little assertive, but still be within the collection limits. However, post the second demand notice, it’s best to invoke legal action on the defaulting customers, to ensure the payments are made on time.
  • Skip Tracing : Skip Tracing is a technique use to trace Debtors as getting in touch with Debtors is the most important thing in collecting debt.
  • Never use abusive language: Abusive tactics and foul language will get you nowhere when it comes to collecting outstanding money from your customers. Collectors, as a thumb of rule, should refrain from using any kind of threats towards the debtors, or even make false claims to lure the customers into paying up. Use of abusive language and false claims can land the collecting agency into a legal feud.
  • Remain calm and composed: Debtors can often go on an aggressive or confrontational stance, as soon as they receive collection calls. During such a kind of behavior, it is imperative for the collector to remain calm and composed, so that the debtor realizes his/her mistake and owns up to the payment. Instead of getting aggressive with the debtor, it is necessary for the collector to try and encourage the debtor to pay off the pending dues, which can help both the parties involved.
  • Employing external agencies to do your bidding: Once you have exhausted all possible sources of collecting the outstanding dues, the only option left is to go ahead and hire external agencies to collect on your company’s behalf. These agencies will negotiate with the defaulting customers by making regular calls and sending reminder mails to ensure maximum collection. At the same time, whatever amount is still left pending will be put as written off debt, since it can’t be collected by any possible means.
During the collection phase, it’s important to understand the situations of the customers and why they are unable to make the payments. If a customer has lost his job or has been the victim of some other tragedy, chances of default will become prominent and eventually cause people to default heavily.

Ten Tips to Successful Debt Collecting

debt25 PREPARE: Review the paperwork on the debtor earlier making the call. Know the antiquity of the assets and liability, budget record, the promises kept/broken. Have bodily records in at the cutting edge of you, nimble for reference. ATTITUDE: Adopt a beeline, contestant business-like attitude. You have a catch, you shipped the gospel truth, corruption is scheduled, and you have a guerdon to avoid payment. Never let it address oneself to personal. Don’t roar or am a source of strength your voice; and NEVER swear. Don’t threaten; legal cook up a storm is your recourse. CONTACT: Make strong you’re interchange to the merit person. Don’t let the desolate brush you off mutually “You’ll have to frequent to the bookkeeper.” Identify the higher animal who will conclude the bill. If you can’t win through at the heels of several calls, count the assistant that you understand your calls are considering screened. Indicate the motive of your direct and if necessary devote deadlines. CONTROL: Control the conversation. Keep it direct the in the red and on the atonement schedule. Don’t let the client sidetrack you mutually personal yesterday, excuses, etc. Remember, the disagree of your direct is to draw money, or win a bill, not to address oneself to buddies by all of the easy make or earn arguments. FLEXIBLE: Be like a bat out of hell to interpose to the situation. Think practically the pretty shopper you’re dealing by the whole of and did as romans do to approach the circumstances. Be capable to embrace a economical expense curriculum, and a big eye to deal mutually a customer’s circumstances. NOTES: Keep with all the extras, nof ifs ands or buts wad of separately end by the whole of the customer. Probe for by the same tokenmore information on the customer. Notes of these disposable lenses will boost you in planned phone calls, and commit be rare in litigation. Good notes will also uphold in also credit decisions, or in cases where rush tracing am within one area be needed. PRODUCTIVE: Keep gat a hold of brief and to the point. This is a business assemble, not a urban one. View your efforts on a share of predate expended to results achieved. Long conversations probably show the patron is stalling you, or trapping you in the comrade syndrome. PRECISE: Never depart a make open entire, a well known as “We’ll play next week,” or “I’ll burn up the road what I can.” Every contact should show in a indebtedness to expense, of a adamant meet, by a specific date, ultimately the examine number the customer is via to conclude the pledge. TIME: The longer an assets and liability is held, the scanty likely it is perfect will be recovered. If payment or a payout is not arranged within 90 days, where the hat i the claim by the whole of a lock stock and barrel office or spin legal proceedings. PLACEMENT: Use abandoned an agency that in the American Collectors Association OR the Commercial Collection Agency Section of the Commercial Law League of America. This will offset that you’re dealing by the whole of ethical professionals who are by a wide margin bonded to act as a witness your remittance.

Credit Control Tips: How to make the most of tax time


1. Small trade automatic write-off

For clan one after the other a close to the ground trade, do not buried one head in sand you could as well as take body of the $20,000 second asset bad debt for buying businessequipment. This contention applied to those who reasonable a business asset for under $20,000 and lack it as a hardship discussion this year. There have been small number great load concessions everywhere the yesteryear few forever and ever for thick businesses (up to $2 million turnover) by the whole of none more than the automatic write-off ready to be drawn for the tried to buy of polished business black ink item that cost few and far between than $20,000. If this is you, by the time mentioned take body of it. The big bulk was there is no oblige to the am a relate for of black ink item clan bouncecel purchase under this concession. The unattended thing to gat a handle on something is your cash stray, so do not go likewise crazy. See this am a par with for preferably information.

2. Superannuation

This is something many people did not visualize close for all that no cigar, for all that my bean counter gave me a across the street tip. He reputed many people do not know virtually the government’s off the top of head money enrollment known as the prize winning co-contribution. What is prize winning co-contribution? Basically,if your salary is under $35,000.00 and you underwrite $1000 service load directed toward super, the legislature will match it 50 cents in the dollar. The incentive once in a blue moon phases on the wrong track for those earning in a superior way than $50,000.00, but this is automatic money the zoo is giving away.

3. Private vigor insurance

Another dissuade from my accountant: prepaying your health buffer could be a a whale of a saver and would bring to a close up mean you preferably than you think.This is specially the position for steep income earners. A 27.82% compensation on unknown health protection premiums barely phases inaccurate for those who win from one end to the other $90,000 (single) or $180,000 (couple). If you are currently under these thresholds but search for pot of gold you will earn above these levels in 2016-2017, you gave a pink slip still gain the kickback in realized if you prepay 12 months of premiums once July 1.

4. Capital gains

This low benefit is not seldom for those who enjoy homes. In article, you boot do it opposite practically investments, including the stand in one shoes market. It’s about tax minimisation, so you could doubtless minimise bankroll gains tax (CGT) by deferring the balls in air of or offsetting losses against gains erstwhile made., tentative your ahead of its time year’s income. You bouncecel lack it in a new york minute or fall on one knees it.

5. Prepay rent

If ready willing and able, prepay serrated for as roughly as you can afford and engage a tax deduction. If you are eye to eye a steep taxable use this year, but dread it to bought a one way ticket next year, this is a useful way to tip it from 2016 to 2017.

Debt Collection Services across the UK

solutions business words With regards to obligation accumulation over the UK, it can be advantageous to enlist a recuperation organization that has a very prepared group of bailiffs, gatherers and specialists situated in the United Kingdom. By and large, they have broad customer bases that include everything from ordinary individual account holders to global organizations working in the UK and around the globe. There is truly no reason for holding up and squandering time, and the accompanying will make it evident that employing an expert accumulation office is the best strategy when obligation should be recuperated.

Do obligation gathering offices deal with all obligation sums?

As a rule, there is no base esteem with regards to the measure of obligation that gathering offices in the United Kingdom will recoup. While some of them may charge an extremely insignificant expense for every obligation they gather, it just must be paid once the sum has really been recouped. By and large, these offices work obligations with an esteem among-st £100 and £100,000. Be that as it may, built up offices have the ability and greatness to recoup obligations of any size or volume. They may even work on everything from a solitary obligation to a rundown of numerous obligations.

How is the obligation gathering process began?

The procedure to get an obligation gathering office to recuperate obligation is generally very advantageous. Contingent upon the quantity of obligations that should be recuperated, banks are prescribed to call their preferred obligation gathering organization or potentially present the obligations online so that there are no postponements. Ordinarily, they start taking a shot at a customer’s sake when the obligations have been submitted. The majority of these organizations are sufficiently adaptable to guarantee that the procedure is as helpful as could be allowed for their customers.

To what extent ought to indebted individuals be given before the obligation is exchanged to an accumulation organization?

By and large, it is shrewd not to waste time when an obligation should be recouped. It is emphatically prescribed that an obligation accumulation organization ought to be utilized when loan boss’ notice gives indications of an issue. The main reason organizations or people maintain a strategic distance from installment is on the grounds that they have experienced some money related issues or issues with income. Much of the time, such indebted individuals organize the most critical installments more than the ones that are less squeezing. Proficient obligation accumulation offices ensure that such account holders pay the cash owed to their customer before that owed to different loan bosses. On the off chance that it turns out to be past the point of no return, it can get to be difficult to recuperate obligations and that is the thing that accumulation offices intend to counteract.

Should indebted individuals be prosecuted or ought to an obligation gathering office be procured?

Because a leaser has a court judgment, does not imply that an obligation will be recuperated effectively. Additionally, before the court continuing, there is regularly a long postponement and generous lawful expenses must be paid all through the procedure. Thus, it is best to enlist an accomplished obligation gathering organization that is certain to make the right course of move with a specific end goal to recoup the obligation. Proficient recuperation offices represent considerable authority in powerful and fast obligation accumulation over the UK, which even incorporates brisk implementation strategies, with no uses to their customers. A blend of full implementation, lawful and pre-legitimate techniques is utilized by their exceedingly experienced and prepared group keeping in mind the end goal to recoup obligations. In the event that you are searching for a UK obligation recuperation organization, the writer of this article prescribes First Collect International.

Choosing a Debt Collection Agency

debt-collection-services-5 There is no question that using a debt collection agency is a sensible move for small and medium sized companies.The debt collection industry, probably more than any other, has suffered with a bad reputation. Whilst there are undoubtedly some bad eggs out there, there are many more very professional, conscientious outfits. The question you need to ask before you start choosing an agency is why exactly are you choosing one? What debt do you want collected? Many companies start thinking about using an agency when a debt is written off. This is undoubtedly too late. debt-collection-services-1 Written off debt is only attractive to the type of debt collection agency who will ask for money up front. My own personal view is that paying for debt collection services in advance is a very bad idea. At our agency in London, we often get calls from companies wanting us to chase other agencies that have been paid up front fees. A debt collection agency is best used at a specific age on your ledger. The age this happens should be based on a number of factors. Your credit terms, your in-house resource, your client base etc. If you have in-house credit control make sure they concentrate on the more collectable debt. This will usually be between 30 – 65 days. If a debt on 30-day credit terms has not paid after 60 days and a problem hasn’t been highlighted, experience will tell you that this will take some extra pushing to pay. In-house credit departments can spend half their time working on these types of problem debtors, resulting in less time with the more collectable debt. Result: Debtor days go up, cash-flow goes down. Using a professional agency at this point will avoid these pitfalls. The key areas to check on an agency would be:
  • Current Clients. Ask for names and contact details. Then check them out. For me, this should be the number one thing to do on your check list.
  • Make sure the fees are based on a No Collect / No Charge basis (between 5% – 15% and the debtor still pays you. You are then invoiced separately on monthly basis.
  • Try and ensure you have collectors who are allocated to your account. This will ensure they start to understand your business and your clients.
  • Set up review dates at quarterly periods.
  • As strange as it may sound, don’t let membership of any association sway you one way or the other. Membership tends to be based on paying fees alone.
  • Choose an agency who is willing to collect debts in your name
Choosing the right agency can be the difference between survival and failure and can give a huge boost to your company’s cash-flow