Hypothetical: you have receivables out over 90 days. Perhaps up 180 days and beyond. You really, really hate the idea of paying a collection agency 33% to get the money that you are legitimately owed. “Why should I have to give that money away. They (the customer/patient) OWE it to me darn it!). So some guy calls on you and asks you the same question but with a twist. He/she says “… Why should you pay an agency to simply send out a letter, collect the money legitimately owed you, then take one third of your money!? After all you would send a check if you received a collection letter in the mail… wouldn’t you? Hire us, and for a mere $7.99, we will send not one, but 4 or 5 letters for you and if you collect your money, you won’t owe us a single dime more! And if the money does not come in, don’t worry, we’re a collection agency too. So then we’ll still try to collect, but it will cost a contingent fee at that point.”
Allow me to plant a seed… a common sense/and verifiable concept that YOU will understand: The older the account, the less likely it will be collected. It is one of the few constants in the collection industry.
Before you allow yourself to be sold “cheaper is better” approach to managing your businesses’ life blood… it’s cash, PLEASE take time to NOTE:
1. Remember rule #1 above. By sending out at least 4 more letters, you have effectively doubled the age of the account thereby decreasing the likelihood of collections. Except now if it goes to their agency, it will be at an unusually high fee… Like 50%!
2. You will most likely be required to purchase letters for accounts up-front. What have they got to lose, whether or not you need the services for all of those accounts at this time.
3. You will most likely be required to sign a contract. Would you rather be contractually tied to a vendor, or have a relationship with a vendor based upon performance.
4. A certain number of accounts will always pay upon receipt of a collection letter. If you have 1 or 2 accounts and want to sign a contract and gamble that most of your accounts will pay with just a letter, then go ahead. We’ve worked with large companies for years, and NONE of them ever thought that letters, all by themselves, provide the highest net result. HARD, SKILLED EFFORT ON THE PHONE COLLECTS MONEY – not the itinerant letter. We can give you names of clients who have switched to us from Letter-only services, and they will tell you why!
Contact Financial Control Solutions for more information about debt collection services and getting your accounts receivables under control.