Credit Policy for businesses and how to extend credit and manage credit risk

A Professional collection service can assist you in collecting accounts that remain delinquent. Collectors have a vast knowledge of collection techniques, technology and compliance issues. Using a professional collection service will save time and likely yield better results.

Look for the following signs that you may need to work with a collection service:

1. A new customer does not respond to the first reselling notices. For some unknown reason, the consumer will not or cannot pay. Potential losses could be kept to a minimum by prompt referral to a collection service.
2. Payment terms fail. In some cases irresponsible consumers pay when and if they want to. This group is responsible for 25 to 50% of the cost of collections. Cost and potential losses are reduced by quick action.
3. The consumer makes repetitious, unfounded complaints. Such consumers are often better handled by collection specialists.
4. The consumer totally denies responsibility. Without professional help, these accounts are usually written off as total losses.
5. Delinquency coexists with serious marital difficulties. These also require professional collection help, with the added urgency of obtaining payment before the disappearance of one or both of the responsible parties.
6. Repeated delinquencies occur along frequent changes of address or jobs. This group is responsible for 90% of all "skips". A skip is a consumer who has moved without informing creditors or leaving a forwarding address. The chance of finding a consumer and collecting a debt will decrease over time, so quick action is important.
7. Obvious financial irresponsibility is apparent. In such cases, little hope exists for voluntary payments and a quick settlement.
8. There is an unauthorized transfer or disposal of goods delivered in a conditional sales contract. Often only prompt professional assistance can make any recovery.