When to Hire a Commercial Collection Agency

Many creditors often struggle with knowing what time is the right time to place a slow-paying account with a reputable commercial collection agency.

Generally, if an account is 90 days delinquent (120 days after the invoice date), you should initiate placement with a collection agency, particularly if no response has been received from the customer.

By then, you have probably sent out several statements and collection letters and made several collection calls. You have tried to bring the customer's attention to the delinquency and your concern about it. The customer's lack of response to your collection calls and letters indicates either a lack of concern, a cash flow problem or is a demonstration of bad faith.

In any case, a collection problem exists, and your best chance for collecting your money is to place the account with a SAS 70 certified collection agency. Burt & Associates is certified by and active in the agency section of the Commercial Law League of America (CLLA), one of the oldest and most respected creditors' rights organizations in the country. Our certification is your assurance we adhere to a strict code of ethics and meet the standards established by the CLLA for commercial collection agencies.

There are times when you should place an account earlier with a collection agency. Call Burt & Associates, the industry's leading debt collection agency focused exclusively on commercial accounts, if you are experiencing the following:

• The customer has broken two or more promises of payment. Your were promised payment, but no checks have been received, and the customer will not send immediate payment by overnight delivery.
• The customer's telephone is disconnected. Double check with the information operator, and if no new listing can be obtained, place the account immediately.
• The customer repeatedly requests documentation even though he/she has been supplied the documentation previously. This common practice is used to delay payment of the account.
• Your customer indicates he/she does not adhere to your terms of sale. For example, the customer may indicate he/she pays bills in 60 or 90 days and not according to the agreed upon terms of sale. If you did not have an agreement with the customer before shipment for extended terms, this is just a delaying tactic. Explain to your customer your terms of sale and request immediate payment.
• Your customer indicates an inability to pay and refuses to provide a specific date for payment or to initiate a realistic payment schedule. This is a sure indication of a serious cash flow problem and immediate steps should be taken to protect your interests.
• Your customer states he/she will "take care of the account," but refuses to make a realistic commitment for payment or to work out a payment schedule. This is another indication of a serious cash flow problem.
• Your customer suddenly indicates, in response to your requests for payment, a dispute regarding the merchandise shipped or your terms of sale. Such a dispute was not raised previously.
• The cost of your own staff's debt collection efforts do not justify further time investment. Placing accounts with a collection agency will help ensure your staff is focused on mission critical activities.