When collections are an absolute hassle, it’s nice to know that there’s an alternative — you can use a collection agency. It’s not a perfect option, but it can be better than spending all of your time chasing after a client for an unpaid invoice. And, since collections are all such agencies really do, they often have resources at their disposal that the average freelancer can’t match.
Outsourcing to collection agencies, and knowing when to hire third party debt collection agency services are often important decisions to consider when you operate a business. When credit is extended to customers or clients it is often a gamble, because even those with excellent credit history can occasionally miss a payment or experience financial hardship. Regardless of the circumstances however, it is still important that their payments are made to you on time as agreed.
Decide the time to use a collection agency
Many big UK agencies are part of larger concerns, some owned by U.S. or EU corporations with call centers in the Philippines, India or elsewhere. These larger agencies are primarily focused on high volumes of accounts from a relatively small number of creditors - usually banks, credit card companies or utilities. These agencies would not normally deal with businesses unable to pass at least hundreds of accounts every month for collection. The debtor - client relationship is not usually of major concern since the creditor will have already have written the debt off and is happy to lose the customer.
Other agencies deal solely with debt they have purchased - this happens when a large creditor wishes to sell an “asset” - a credit or loan book. The purchaser often pays as little as a few pence in the pound and hopes to recoup the outlay and make a profit by collecting more than they paid. Again, debtor - client relationships are not a high priority. Of course one of the best ways of choosing an agency for your profession or business is to ask the agency for appropriate references. It is important to note that the debt collection industry is regulated by the Office of Fair Trading and all companies offering collection services for regulated debt need to be licensed. This can be checked on-line or by asking to see the current Debt Collection License.
Why this particular agency
A debt collection agency can take a variety of approaches to recover an overdue account – none of them are rocket science but to be successful they do require an inordinate amount of experience. In addition the best debt collection agencies employ people who are thoughtful, articulate, self reliant, resilient and above all good listeners. Agencies will use a range of well proven collection letters carefully chosen and often written for specific clients to elicit an early response from a customer. This is followed up by telephone contact where necessary. Payments by debit or credit card are usually taken over the phone. Most accounts - particularly for small or medium sized businesses and professional services - are resolved by letter or telephone; in fact experience shows that as many as 85% of debts can be collected this way.
What if everything else fails for your favor
If you try to recover a debt, but are unsuccessful, you will be able to claim part of the loss on your tax return.
Outsourcing to collection agencies, and knowing when to hire third party debt collection agency services are often important decisions to consider when you operate a business. When credit is extended to customers or clients it is often a gamble, because even those with excellent credit history can occasionally miss a payment or experience financial hardship. Regardless of the circumstances however, it is still important that their payments are made to you on time as agreed.
Decide the time to use a collection agency
Many big UK agencies are part of larger concerns, some owned by U.S. or EU corporations with call centers in the Philippines, India or elsewhere. These larger agencies are primarily focused on high volumes of accounts from a relatively small number of creditors - usually banks, credit card companies or utilities. These agencies would not normally deal with businesses unable to pass at least hundreds of accounts every month for collection. The debtor - client relationship is not usually of major concern since the creditor will have already have written the debt off and is happy to lose the customer.
Other agencies deal solely with debt they have purchased - this happens when a large creditor wishes to sell an “asset” - a credit or loan book. The purchaser often pays as little as a few pence in the pound and hopes to recoup the outlay and make a profit by collecting more than they paid. Again, debtor - client relationships are not a high priority. Of course one of the best ways of choosing an agency for your profession or business is to ask the agency for appropriate references. It is important to note that the debt collection industry is regulated by the Office of Fair Trading and all companies offering collection services for regulated debt need to be licensed. This can be checked on-line or by asking to see the current Debt Collection License.
Why this particular agency
A debt collection agency can take a variety of approaches to recover an overdue account – none of them are rocket science but to be successful they do require an inordinate amount of experience. In addition the best debt collection agencies employ people who are thoughtful, articulate, self reliant, resilient and above all good listeners. Agencies will use a range of well proven collection letters carefully chosen and often written for specific clients to elicit an early response from a customer. This is followed up by telephone contact where necessary. Payments by debit or credit card are usually taken over the phone. Most accounts - particularly for small or medium sized businesses and professional services - are resolved by letter or telephone; in fact experience shows that as many as 85% of debts can be collected this way.
What if everything else fails for your favor
If you try to recover a debt, but are unsuccessful, you will be able to claim part of the loss on your tax return.
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