Collections

Collections for Past-due Accounts

When a business experiences difficulty in getting debtors to settle their past-due accounts, it can profit from handing the debt over to an experienced debt collection agency for collection. An agency which deals with debtors frequently and has spent time devising a collection method that works can help to increase cash flow and can also prevent the situation from continuing to the point where a lawsuit is necessary. While collections are not guaranteed success, when a first-rate agency is used, success is more likely than not.

Fees for Collections

The fees charged by agencies for collecting debts differ, as different agencies make use of different payment systems. The system most beneficial for the client is without a doubt the commission system, as an agency which charges a fixed percentage of all successful collections will not be able to charge for time which has not been spent actively working at getting debtors to settle their outstanding debts. A monthly fee does not always reflect the amount of work performed, and can mean that the client pays for unsuccessful collections in addition to the successes.