3 Things To Know About Using Collection Services

Finance & Money Blog

As a business owner, with an expanding business, you may have been handling your account collections in-house. Over time, this may have become increasingly difficult. If you are having issues maintaining your accounts, and specifically, handling your collections accounts, you may want to consider using a collection service. Here are three things to know about using a collection service and how your business can benefit from the partnership.

Selling or Working the Account

The first thing you will need to know about using a collection service is if you will be selling the account to them or just having them working the account. If you simply want to close the account out, you can sell the account to the collection service. This allows you to close the account, make some money from it, and move on. However, you can also have them work the account for you. This means you will pay a percentage of the fee they gain from the collection to the company for their services while receiving the rest of the money collected to go towards the debt.

Skip Tracing

One of the issues you may have with closing out the account and collecting what is due is that the debtor has left the area. This means that all the information you have on them for an address or other contact information is invalid. If that is the case, a collection service can use skip tracing techniques to find them. This can be a valuable resource, especially when you are trying to collect and close out large sum accounts. Skip tracing will use techniques to find the debtor, obtain a valid address and phone number, and help the collection service collect on the account.

Fee Schedules

You will want to know what the fee schedule is for the collection service before you hire them. Keep in mind, not all collection services are the same. You will need to understand the percentage the collection service takes from each successful collection account. You also need to know how much they may take if the account goes to small claims court or if the account is a larger account. You can discuss fee schedules and any related fees during a consultation. The fee schedules may also adjust depending on the account load or from account to account. For example, if you have medical billing accounts that deal with insurance claims then the collection service may be more.

If this sounds like something you want to move forward with, contact your local collection service today. They can provide accounts receivable management as well as collections and related services. They can also help you with pricing questions and any other questions you have about their services and process.


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