B2B is short for business to business. So, B2B collections is what occurs when one business must engage in collection practices to collect what is owed to them. If you’re new to business, you may be unsure about when the time is right to employ a B2B collections agency. Here’s how you can make this decision.
Familiarize Yourself with Each Past Due Account
When there are past due accounts, you have several choices. You can hire an employee to work on collections. You could write-off collections. You could sell the debt. You could file a lawsuit against the debtor. You could hire a B2B collections agency to handle those accounts for you.
The first thing you must do before deciding which path to take is to familiarize yourself with each past due account. Not every past due account is worth the expense of taking to court. You should review and consider:
- The overall age of the account.
- How long the account has been past due.
- How much is owed to your business.
- How long you’ve tried to collect on the account.
- The methods you’ve used during B2B collections.
You must develop criteria that guides you in determining which accounts will be written off because they’re not worth the expense of chasing and which accounts should be pursued.
You’ve Tried to Collect on the Account
If you’ve tried in-house collections on past due accounts, it may be time to hire a B2B collections agency. This can reduce your stress and allow you to focus your attention on more important business matters. The B2B collections agency generally works on a contingency fee unless you sell the debt. When a contingency fee arrangement is used, it means that the company will keep a certain percentage of the recovered money as their payment.
The Business Seems to Be Avoiding Your Contact Efforts
Sometimes all of the phone calls and letters in the world don’t make a difference. If the business seems to be avoiding your attempt to get paid what you’re owed, it may be time for you to consider outsourcing to a collections agency.
You Don’t Know Collections Laws
Collections laws are established at both a federal and state level. If you’re not familiar with collections laws, you may find that hiring a reputable agency is your best bet. Failure to abide by both federal and state collections laws can open up your business to the possibility of a lawsuit.
Learn More about B2B Collections
If you have past due accounts, you need to understand the basics of B2B collections. Call Clients ARM for your free consultation. We’ll explain the over all process to you and you’ll learn more about how we use our process to get you paid.