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Eastpoint Recovery Group Tips: When Should Your Business Call a Debt Collection Agency?
Running a business is difficult enough without having to also deal with delinquent payments. Whether you are a large corporation or a small business, a situation may arise when a client or customer owes you a substantial sum and is simply not paying up. Unfortunately, it can be very difficult to track down an outstanding debt on your own, which is where a debt collector comes into the picture.
But when is an appropriate time to call a debt collector, and when will it not suite your business interests?
In most states there is a statute of limitations on an outstanding debt, which means you cannot try to collect that debt after a certain amount of time has gone by. You can learn more about the New York statute of limitations as it applies to different types of debts here.
In general, it is advisable to contact a collections agency sooner rather than later if you are trying to chase down delinquent payments. In many cases, the longer you wait, the more difficult it will be to reclaim the debt owed.
The Amount Owed
As with anything business, deciding whether or not to pursue a debt is based on a cost vs. result analysis. For example, if you are a large corporation, a $300 debt may not be worth the cost of hiring a collections agency to pursue. On the other hand, if you are a small family-owned business and a client has a $2,000 outstanding debt, it may be in the financial interest of your business to pursue that payment.
Ultimately, it is up to you to decide whether or not dedicating resources to reclaim a debt is worth it for you and your business.
When deciding whether or not to pursue a debt, it is important to think about the relationship you have with the delinquent customer. If, for example, they have a long history of making payments on time and their delinquency is new, it may be a good idea to try to work with them and figure out why the payment was late before pursuing action.
If the debtor has a long history of delinquency however, hiring a collections agency sooner rather than later may be in your best interests.
Choosing a Collections Company
When you look for a collections agency to hire, it is important to do research into how they do business. Unfortunately, many collectors circumvent FTC guidelines, and even overstep legal boundaries to collect payment. Ensuring you are working with an ethical company that operates in compliance with the law is essential to securing the funds you are owed.
If you find that your business is in need of a professional, ethical, and compliant collections agency, give the team at Eastpoint Recovery Group, Inc. a call! We pride ourselves in being a results-driven and customer-focused agency that operates wholly within legal and regulatory guidelines. Get in touch with one of our representatives today to learn more about what we can do for you and your business!
This article does not necessarily reflect the opinions of the editors or management of EconoTimes.