4 Common Misconceptions About Past Due Accounts
It’s something that all businesses face at some point. If you offer a service of any type, you will eventually have to worry about how to handle past due accounts. What do you know about past due accounts? As a respected professional in the accounts receivable management industry, Clients A.R.M. understands how you may find yourself in over your head and confused about your options to collect on your past due accounts. That’s why we wrote this post. We want you to know the X common misconceptions about past due accounts.
You Have to Be Mean to Get Paid
This is a common misconception. First, you have to remember that most individuals don’t allow their accounts to go past due just for fun. They usually have, at least in their mind, a legitimate reason: they really didn’t receive a final bill, a job loss, or their family has other pressing needs. Calling to collect on your past due accounts isn’t about being mean to anyone. In fact, if you go out of your way to call and harass people, you can be sued for violating the Fair Debt Collection Practices Act.
They Did Not Pay Because They’re Unhappy With Your Services
There’s a very small percentage of people that will fall into this category. Sometimes, people don’t believe they should have to pay even after they’ve received a service. This isn’t always the case. Most often, when you call to collect you’ll find that people have other reasons. Good debt collectors listen to the people who owe the money to help find a way to get the debt paid.
You Have to Collect on Your Own Debt or Sell the Debt to a Debt Collector
This is another common misconception. Yes, you can do your own debt collection. However, you should really consider whether you have the time to do it yourself or the funds that you would need in order to hire an employee to do it on your behalf. When you collect on your own debt, it is known as first party debt collections. That means that you, the first party that is owed money, makes an effort to collect.
While you certainly have the option of selling your debt to a third party collector, you don’t have to do that. At Clients A.R.M., we offer first party debt collection services. This means that we make the calls on your behalf. This doesn’t involve you selling the debt to us. Our service also costs less than hiring an employee. Additionally, our account manages have a minimum of 15 years of experience. We know how to work with people and help them find a way to get their debt to you paid.
You Can Just Rely on Collection Letters
Collection letters or demand letters are a good way to put someone on notice that they are past due. However, can you really guarantee that they receive the letter? Can you guarantee that they opened the letter? Although mailing letters may be cheaper than picking up the phone, the issue is that you won’t necessarily get the return on investment that you will by performing first party collections over the phone. So, when you are considering your options for first party collections, make sure that you take into consideration the likelihood of response.
Talk to an Expert
If you could find out more about your first party collection options, and if you could find out more without any obligation, would you do it? Clients A.R.M. is offering a free process review. We will review your accounts receivable process (including collections) and show you how you can improve those processes to ultimately improve your bottom line. We provide this review for free. It takes very little of your time, and is completed via online collaboration. We offer the ultimate experience in convenience and service. Ready to find out more? Click here to schedule your free review! Questions about collections? Comment below!