When do I use a Collection Agency? Part 2

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Aug16

When do I use a Collection Agency? Part 2

August 16, 2006

Know More: Bad Checks, Creating a Credit Policy, Credit Reporting, FAQs, Skip Tracing, Using Collection Agenices, What makes a Good Collector?

There are some indicators you can look for that can send up a red flag that you should stop your in-house collection efforts and place those accounts with an outside debt collection agency. Some things to look for are:

Non-Sufficient Funds checks (NSF)
The customer is never available to speak to you.
Extreme changes in their payment habits.
Broken payment promises.
Unfounded disputes or complaints.
Their business is operating at a loss.
Their biggest customer went bankrupt.
They change banks.
They are growing faster than they can keep up or than they planned.
They are facing cash flow problems.
They have internal disputes, with departments partners or principals.
They have other large debts.

Your credit policy should cover these things and tell your credit manager what to do in each situation. When you have a policy in place for any of these problems, you can handle them smoothly and move on to collect more money from customers without these problems.

Don't spend more money chasing bad debt when you can outsource that and collect more and utilize your in-house resource more efficiently.

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