1.	How can I get my money?
2.	What should we look for in a collection agency?
3.	We have a collection company soliciting our past due accounts, as low as $50. Is this company really going to do anything with these accounts? I do not see how they can afford it.
4.	Many collection companies allow so many days of "fee-free" collections. What exactly does that mean?
5.	what advice would you give a business that is setting up in-house collections for the first time?
Answers
1.	How can I get my money? Submitted by:  anyamous   In a word, ask for it! All too often companies are timid about asking their customers for the money that is do them, for the products or services that they have provided. As a result the Customer either takes advantage of the good nature of their vendor, or simply forgets (conveniently or otherwise) about the obligation. You have a moral and legal right to expect repayment for your goods or services. That is why our motto is "Pacta Sunt Servanda" (Latin for "Agreements Are Made To Be Kept") Back to Top
2.	What should we look for in a collection agency? Submitted by:  Bob   bob@mixi.com First you must determine your most pressing needs. Is your company looking for advice, day-to-day assistance, or simple contingent recovery services. Once you have determined your need/s you can search for a quality receivable management company via the Internet, word-of-mouth, trade group recommendations, or personal recommendations. The latter often being the best. Once you have located one or more potential companies, you should interview them on the levels of service they offer, their experience levels, time to implement services, communications and costs. Get their responses in print, as well. Be sure that all charges, such as contingency fees, pre-leagal fees, and attorney fees are outlined, in advance of any placement. Also get at least two and preferrably three references and "call them". If you are satisfied with their written follow-up and written agreements and you have gotten positive responses to your inquiries, then choose the company you feel most comfortable with and then who offers the best value. A final word of advice - do not make long term commitments to any one company. Evaluate them for six months and if you are satisfied, move forward. If not consider the next candidate. Back to Top
3.	We have a collection company soliciting our past due accounts, as low as $50. Is this company really going to do anything with these accounts? I do not see how they can afford it. Submitted by:  Phil   Collection agencies differ from internal credit & collection departments, in that collection work is all they do. As such a quality collection agencies generally have shophisticated computerization and communication systems, to assure large volume coverage, at minimal costs. There personnel are trained to process accounts quickly and effectively. As a result they can offer to collect accounts, as little as the $50 you mention. Now, will the agency spend much time or resources on the $50 account - not likely. Even at a 50% recovery rate (and that is high, now-a-days)they would earn $25 for the recovery. Given most agencies liquidate accounts at an average of 40% or less, effeciency is the key, especially on small-balance issues. Several letters and several long-distance phone calls would not be efficient. With that said, it still makes sense to place, even the $50 accounts, if the agency is willing to send a least two letters and a phone call. What do you have to loose? Back to Top
4.	Many collection companies allow so many days of "fee-free" collections. What exactly does that mean? Submitted by:  Dan T   dan@americanspice.com Many collection agencies provide their clients with several days "grace period" after the collection agency sends their "initial demand" to the their client's debtor. This period of time is generally 7-10 calendar days, from the date of the initial placement. Any money that is collected from the debtor, in this time period, either sent to the client or the collection agency, does not have a fee charged. After the "free demand period" an agency's normal fee structure will apply. As a general rule my years of experience with, debt collection, has demonstrated that very few (usually under 5%) of accounts, placed with an outside collection agency are collected in the normal 7-10 day free demand period. This generally leads to most creditor-companies deciding to forego any free demand period and have their collection agency begin immediate and forceful collection techniques. Back to Top
5.	what advice would you give a business that is setting up in-house collections for the first time? Submitted by:  Dawn Shurelds   dawn.shurelds@pprinc.net That you either send the person you are designating to handle the department to learning programs in the area of credit and collections, as well as time management, and handling difficult people. If the individual is already an established credit and collection expert give him or her the right tools and empowerment to make decisions. The department should have a well organized process for handling recent delinquency as well as advanced delinquency issues. These processes should include the use of verbal and written correspondence. We strongly recommend email correspondence where you are able to obtain permission to do so, as it is fast, convenient, and provides a good audit trail. If you wish to take the department to the next level we would strongly suggest employing a credit and collection consultant who can provide the desired level of professional input and tried and true processes which will assure successful collections. Make sure you have a collection agency and/or attorney that you feel comfortable with, not only in relationship issues, but service issues and pricing. The lowest price is not always the best deal. Regards, The LSI Answer Staff Back to Top

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