Any business can face financial problems that work against the effort to maintain sufficient cash flow. One dilemma that can have a significantly negative impact on your company is issues in accounts receivable. When a service is provided and your customer does not pay, meeting your bottom line becomes difficult. It is a debt collection agency’s obligation to recover your earnings so that you can continue doing business.
Don’t expect anything to go “back to normal” post COVID, and what defines as “post” still remains to be seen. Some experts say that it may be 2022 before we can safely resume old activities in some semblance as they once were. The pandemic has left its mark, not only on our physical behaviors, but our financial ones as well. In these continuing uncertain times, debts rise, layoffs continue, and there is a consistent economic downturn for many businesses. Many entities are overwhelmed with the daily tasks associated with trying to make up for lost time during the shutdown and by trying to throw collection efforts into that mix only makes your employees less productive with other tasks.
- Using a collection agency is too expensive.
The benefits of using a collection agency far outweigh the costs associated with them, as long as you are working with an agency that has a high recovery rate. Companies that spend months and sometimes years trying to collect on old accounts are often just spinning their wheels. Agencies with long histories of success can collect quicker and easier than you ever thought possible, turning your aged receivables into bottom-line revenue.
- Collection agencies only work on very old accounts.
Collection activity goes through many phases. Outsourcing receivables, for instance, is the process of using a collection agency partner to do a “soft-touch” method of collections that may simply be calling a client on day 31 and giving them a gentle reminder that their bill is due. This outsourcing activity may last 30, 60, 90 days or longer until it is moved into a more traditional collections process that involves letters, more frequent phone calls, texts, emails, voicemails, and other collection efforts. From there, agencies will work with their clients to score and sort bad debt, and eventually move on to litigation, if necessary.
- A collection agency will just upset my customers, or my patients, and I’ll get a bad reputation.
Threats and abusive language is prohibited by federal law, and any agency engaging in such activity will face severe consequences. The best agencies recognize that they are ultimately the face of the business they represent, and as that agent, they should be conscientious of the fact that the customer or patient will associate their activity with the businesses they serve. It does not behoove a collection agency to damage relationships with the customers of their clients.
- Collection agencies do not want to work with a small business.
Many collection agencies such as Account Resolution Team, understand the value of small businesses and the positive impact that they have on our communities. Our economy thrives on small and large businesses. Collection agencies that embrace their small business partners have deeper relationships with the businesses that they serve in those same communities.
- All collection agencies are the same.
In reality, collection agencies vary as much as any business in any industry, just as no two doctor’s offices, restaurants, or banks are exactly the same. Some agencies charge monthly fees, others are contingency-only. What is most important though, is that you choose an agency that has a longstanding history of success and very high recovery rates.
- Collection agencies cannot find clients that change their address and phone number multiple times.
While this is certainly true with some agencies, it isn’t a fact for those of us with the latest innovations in technology. Account Resolution Team was instrumental in the development of the leading debt collection software in North America.
- When it comes to collection agencies, meaner is better.
Showing empathy, validating fears, providing support, and building trust have not always been core objectives for many collection agents. For this reason, consumers often respond to collections communications negatively as they are already on-guard before the framework of the solution can be established. Account Resolution Team understands this level of heightened human need and takes steps to promote kindness during the collections process.
- It is not worth the time it takes to get a collection agency all of my accounts.
This is the prime reason that technology plays a critical role in the adaptation of late accounts into a system. For Account Resolution Team, gone are the days when mass uploads required manual entry into a system. By utilizing state-of-the-art technology, accounts can be loaded immediately into the system, streamlining the process that begins collecting accounts to turn aged receivables into bottom-line revenue.
For more information on how Account Resolution Team can help YOU get your money, call 423-586-7613 or visit www.accountresolutionteam.com
If you’re in a product or service industry, you’ve likely faced a time when you realized your bad debt was catching up with you. At this point, you may have considered the use of a collection's agency. Maybe you were even scared to take the leap of faith? These fears may be the reason you’re missing out on the revenue that your business needs, negatively impacting your day-to-day business. In fact, a lack of funds can affect employee retention, lead to freezing critical marketing activities, and in extreme cases, can ultimately result in closing your doors permanently.
Ashley has received six consecutive payment reminders for her past-due credit card balance. Due to her sub-par credit score, her debt gets sold to a collections agency where she begins to receive phone calls and letters requesting payment. When Ashley is finally ready to make a payment, she returns the call to the collection's agency to be greeted and assisted by an AI-powered virtual agent to make a payment on her balance.
Did you know that 61% of consumers have been negatively impacted by COVID-19? The greatest increase in bad debt began in March 2020, and as a result, the largest phase of third-party collections is estimated to begin in October of 2020, extending well into 2021.
Life as we know it revolves around technology. Business functions, processes, communication, information, and productivity all rely on some form of technology whether it’s your computer, cloud storage and data center, telephone, or even the software you use on a daily basis. For the collections’ agency, this reliance on technology is no different. Earlier on the blog, we discussed technological needs in collections. But what we haven’t discussed is how technology has evolved the collections process. Since it first began, the art of collections has changed tremendously. Now, the collections industry relies on the use of technology to communicate, store, and analyze information like analytics, automation, and Compliance Management Systems (CMS). If you're not using an agency with the latest technological advancements in debt collection, you may even ask yourself if you're doing it wrong.
Compliance management is a disciple that can not, and should not be taken lightly no matter what industry you are in. However, when it comes to collections, it is even more pertinent to success. Over the years, new regulations and compliance policies are enforced and/or amended, differentiating the way agencies collect and emphasizing the need for adaptation. Although collectors are legally entitled to attempt to collect all owed debts, there are restrictions on the methodology they utilize including the Fair Debt Collection Practices Act, Fair Credit Reporting Act, and Software Compliance.
From self-isolation to job loss, and most importantly, the tragic loss of family members and friends, COVID-19 has affected every individual in some way; not one person is exempt from the perils of this economic and physical state of emergency. With new restrictions hitting the headlines daily regarding debt collection, and the historical negative perception of debt collectors, many regulators called for a stop in collections activity. However, this may actually cause more stress for people impacted by financial difficulties caused by COVID-19.
Though we may not like it, debt is often a necessary part of life, meaning there's absolutely no shame in borrowing from time-to-time. Unfortunately, many people find themselves in these financial situations simply because they do not know how to handle the collection process. When this happens, debt just continues to pile up, leading to negative outcomes.