Businesses of all sizes struggle with unpaid invoices from their customers, and this problem intensifies during an economic downturn. Not getting paid after your product or service is delivered can dramatically hurt profit margins. Your employees are probably not adequately trained on how to effectively work with overdue invoices. Also, removing them from their primary responsibility and turning them into part-time debt collectors can be very frustrating. Collection agencies have served businesses for decades. billions of dollars each year that their customers could not collect on their own. They serve both large and small businesses and protect their legal right to be paid. Each state in the United States has a different set of debt collection laws. Many states also apply these laws to original creditors. Violation of these debt collection laws may result in penalties and, in some cases, may result in legal action by your debtor against you. America is the land of lawsuits, sometimes legitimate and sometimes frivolous. This problem is particularly acute in the healthcare industry as healthcare professionals such as physicians, veterinarians, dentists and physiotherapists purchase medical malpractice insurance for their protection. They hire a medical collection agency to collect patients’ money that their staff couldn’t get back on time. Transferring accounts for collections over 90 days past due is standard practice in the healthcare industry. Small businesses can have B2B and B2C debt. The methodology for collecting bills from consumers is totally different from that of a business. A consumer collection agency will usually offer lump sum written requests or a contingency-based collection call service. For trade receivables, collection is carried out by means of collection appeals or by judicial means. Commercial (B2B) collections are almost always contingency based with fees ranging from 20% to 50%. In most cases, a commercial collection agency will be able to issue a collection rate of over 60% on viable debts. Consumer collection (B2C), on the other hand, has a collection rate of around 30% on viable debts. The biggest mistake small businesses make when choosing a collection agency is to hire an agency closer to them or offer the cheapest rates. . First, the location of a collection agency does not matter. Second, the collection agency charging minimal fees will likely have inexperienced or underperforming collection agents. Good debt collectors don’t charge lower fees and ultimately the amount a collection agency collects matters most. For example, if you assign an amount owing of $ 20,000 to a collection agency that charges 40% contingency fees and is able to recover $ 10,000, you will get $ 6,000 in your pocket. Another collection agency charging a 30% contingency fee may recover much less. Suppose they can only get $ 7,000 back, then you get $ 4,900 back. In the debt collection industry, you usually get what you pay for. Red and inexperienced debt collectors can damage your reputation. A small business debt collection agency will also perform various checks on all of your debtors, including tracking jumps, bankruptcy screening, and disputed customer screening on all assigned accounts to help them improve their collection rate. . Without collection agencies, billions of dollars in commercial invoices will go unpaid, resulting in massive losses and layoffs. The role of collection agencies in the business ecosystem is undoubtedly very crucial. Debt collectors are required to work amicably and diplomatically by law. It is always advisable to hire a collection agency with the license to collect in all 50 states. If your debtor moves to another state, the same collection agency will continue to work for you. There are over 5,000 collection agencies in the United States. It is essential to select an agency that responds to FDCPA and HIPAA complaints. They should also have a low complaint rate and higher BBB ratings. If you need to find a good collection agency, talk to your doctor or dentist, chances are they already use one and will be able to recommend you.