Why you need to hire a collection agency?
One of the worst nightmares to any business is unpaid debts because that means loss of profits. However, there is a way out. You should seek the assistance and help of collection agency if you want to reduce the incidences of debts being considered as bad, and loss to the business.
An account receivable collection agency is not a debt collector in the strict sense of the word but does something close to the collection of debts. When you sell to a customer on credit, you hope that it will honor its obligations and pay on time. However, in some instances the customers do not pay in time and thus their accounts become long overdue. This can be very frustrating for business because customers must pay on time so that it maintains sufficient cash flow and operating capital for the business.
A sale cannot be considered as complete unless and until the money has been received by the business. This is the reason why a collection agency plays very critical role the development and growth of business. It ensures that you get actual money for the sales that you made. The agency does this while observing the relevant laws and legislation and while being careful not to impact negatively on business relationship.
In collecting the accounts receivables, the collection agency does so in the name of the business that has hired it. Thus, its actions bind you to some extent. You should issue instructions that will make the work of the collection agency easier. Thus, for example by giving it information about the non paying customers such as payment history, duration of time you have dealt with them, etc.
It also works best if you engage the collection agency on long term basis. However, if your business is small and only requires the service of a collection agency once in a while, then you can hire only when the need of doing so arises. However, better still you should entrench the practice of hiring one collection agency that has proper market knowledge and has good record of compliance.
Remember to ask for references before you hire. Once you get the references from the collection agency, contact at least two creditors who carry on business similar to yours and then ask them to provide honest feedback of that particular collection agency. Also check the reputation of the collection agency by contacting the local chamber of commerce or BBB (Better Business Bureau).
Note however, that there are allegations these organizations tend to give more preference to businesses which support them. So, even if a collection agency has a positive reputation in BBB or the local chamber of commerce, you still need to verify it by seeking information from other sources. Similarly, when an organization has negative feedback, you should also check with other bodies and sources to verify that assertion. All in all, a Toronto accounts receivables collection agency will make the collection of accounts receivables efficient and less costly to your business.