Factors To Consider Before Hiring a Collection Agency

Business experts agree: hiring a collection agency is a good idea. This allows entrepreneurs to focus on their core competencies while ensuring that any debts or outstanding balance to their company are being properly addressed. Before engaging in any collection agency though, it is important that business owners take these factors into consideration.

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Micromanaging: Understand that moving delinquent accounts to a collection agency means letting the latter do the business for you. This sounds obvious, but many entrepreneurs forget this -- especially during the first part of the process. It is also typical for clients to bypass the procedure and call the business owner to "work out a deal" once they find that they’ve been placed under an agency. Owners must recognize that all handling processes need to be referred to the agency. If the debtor calls the owner, they must be firmly but politely told to speak with a representative from the collection agency.

Each collection agency is different: Choose an agency that fits your budget. Most agencies send payments once a month, and sometimes twice a month. Some charge by the letter or e-mail. There are pros and cons to each type of payment scheme. Business owners should determine which ones best suits their needs. The most important factor to consider would be finances, but should also include the severity of cases.

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Results take time: This is true for all collection agencies. Indeed, choosing the right agency does speed up the process a little, but business owners should understand that agencies never force people to pay their debts within a given time frame. Agencies need time to process and work on the account. Agencies are also required by law to give the debtor 30 days to request verification of the debt or dispute it.

Brennan and Clark is a top collection agency in the country. The company has achieved its success due to its practical and effective strategies. Learn more when you like this Facebook page.

What People May Not Know About Business Credit Scores

Business collections impact heavily on a company’s business credit score, which in turn has a huge effect on the business’ overall success. Here are a few choice facts on business credit scores.

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• Personal FICO scores have a range between 300 and 850. Business credit scores, however, range from 0 to 100. Companies that provide business credit scores such as Dun & Bradstreet and Equifax have additional scores for risk assessments of companies.

• Unlike personal credit scores that use a standardized FICO algorithm, business credit scores depend heavily on the bureau.

• Business credit scores and reports only have information on accounts on the business. There is no personal information. However, companies that lend credit and issue credit cards also look at personal credit information as well.

• Few people can only access personal credit reports. Business credit reports though are public, which means anyone can gain access to the information for a fee.

• Though bureaus that are responsible for giving business credit scores collect and verify information differently, the sources they gather information from are generally the same.

• On some occasions the information business credit bureaus report is flawed. But this is easily remedied when a company provides evidence that the numbers are different.

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Brennan and Clark helps companies eliminate credit losses by providing them with assistance on improving their collection process, which generally helps with their credit scores. Learn more about the company’s services by visiting this Facebook page.

Protecting The Company Credit Against Scammers And Frauds

Scams have evolved in complexity, and have become more devastating to people and companies. The increasing sophistication of scams is also tied with the advancement of technology. Many companies have incurred debt, and had their credit score ruined by scammers. Protection from scams and frauds could very well save the business from being scuttled by such malicious practices.

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First things first. Business owners should know the scams that target their businesses, and how these are executed. A good example would be text messages that employees receive requesting vital information about the company. The identities of these text message senders should be verified, and approached with utmost caution and scrutiny. Company management should also warn their employees about giving certain information online to websites.

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Business owners and management really have a big role to play when it comes to the safety of their companies. From the start, rules and regulations have to be put in place to protect both their companies and their employees. The only time company employees can share information is when the party with which they’re exchanging information has done similar transactions with the company in the past.

Business owners should also make sure that their internal systems are secure. Passwords to their computers and their websites (if they have any) should be changed at least twice a year.

All these can help protect a company from fraud and scams, and ultimately lead to a favorable credit score.

Brennan & Clark, a member of the Commercial Collection Agency of the Commercial Law League, is a business collections firm that offers world-class service.  Read more about debt collection and the industry here.

What Businesses Should Know About Credit Extensions

A lot of companies extend credit to their customers with the idea that this will help them gain more business. While extending credit may seem like a good decision for some companies, it is not always the case.

Businesses like retail stores, healthcare providers, and transportation services require straight cash transactions for their rendered services. But other business types pursue extended credit. Offering credit can get customers to spend more which can turn into increased sales. It can also establish healthy company-customer relationships.

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Many businesses offer credit in hopes that they can sell better than their competitors. But offering credit can bring more losses than gains for some companies, especially with startups and local businesses. Credit can cost the company money. When a seller offers credit, the customer is using the product they have on loan, but the company gets nothing from it until they are paid.

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When companies offer credit, they assume that the customer has the intention and ability to pay. They look at customers as blank, clean slates who can pay on time. But often, customers take full advantage of the credit, causing the company to lose money. Being aware of a customer’s credit rating and history can be a great way to know about their intentions of paying. Offering credit is not always bad, but it could cause damage if it is given to the wrong customer.

Brennan & Clark is a collection agency that helps businesses get profit through customized receivables support solutions. More about the company’s services here.

How Debt Buying Works

In the 1980s, the savings and loan crisis significantly affected the US economy.  Banks were shutting down at an alarming rate, with the Federal Deposit Insurance Corporation receiving the assets of the banks to compensate for the expenses incurred in repaying the depositors of closed banks.

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The assets they obtained were then offered to private and institutional investors willing to buy the properties of the closed banks.  The Resolution Trust Corporation then conducted auctions to allow different organizations to bid blindly – the bidders were not allowed to know, let alone evaluate, the assets beforehand.

This started the debt buying industry, leading to the establishment of many debt buying firms.

When creditors decide to sell off debts, they create portfolios that categorize these debts into fresh debts (accounts that are up to six months old), primary debts (up to 12 months old), and secondary and tertiary debts (up to 18 and 30 months old, respectively).  These sorted debts are subsequently marketed and put up for bidding among sellers.

The buyer of the debt then decides on whether to directly collect from the debtor, hire a debt collection agency, resell a fraction of the debt, or to do a combination of any of these.

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Brennan & Clark is a business collections agency, providing customized receivables support solutions to eliminate credit losses for businesses.  For more information about the firm, visit this blog.

Streamlining the Phone Collection Process

There are numerous ways to collect debt from pledgers. The primary method of reminding them to pay their dues would be invoices and letters. However, those pieces of paper don’t always do the trick. That is why the next best thing to do is to take to the telephone and talk to debtors.

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The great thing about the telephone-based collection is that one doesn’t need to travel long distances just to communicate with a client. It’s cost-efficient, time-saving, and energy-sparing. However, before engaging the other party, some techniques and maneuvers need to be employed so that the debtor won’t be intimidated and a sense of responsibility would be instilled, instead.

Before talking to the client, preparations must be made first. This means that the collector needs an attitude shift. He must also research about the debt and the history of the debtor, decide in advance if accepting an amount less than the full payment is acceptable, and determine when would be the best time to call. During the call proper, one must make sure that they are talking to the right person. Then the collector should ask for the full payment. What follows is waiting for a response. Never break the silence because the longer the silence, the greater the pressure that is exerted on the other party. One should listen to the debtor intently as well because clues on how to motivate him to pay up will be found in his speech.

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Brennan & Clark helps organizations establish a well-defined goal for their collections, evaluate their internal procedures, and implement changes that will make their collections strategy more efficient. For more on debt collection, click here.

Leveraging Credit To Your Advantage Through a Good Credit Policy

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Credit has been one of the most effective ways to attract more customers to a retail business. The appeal of buy now, pay later enables customers motivates them to purchase while increasing their buying power significantly. Merchants also benefit from ensuring a captive audience; customers can make big purchases immediately rather than waiting, which could increase the likelihood of them taking their business elsewhere.

However, credit comes with risks. Because no cash is received, businesses take in a temporary loss every time they sell with credit. This can become really problematic when customers fail to pay on time. The tempting allure of credit sometimes often snags truly irresponsible buyers who end up purchasing beyond their means.

Because late-paying or nonpaying customers can interfere with cash flow, it is important that businesses work toward a credit policy that opens up the customer's buying power without extending credit to every customer that asks.

Here are a few ways to make credit policies work for a business, maximizing its benefits while reducing its risks.

1.Offer cash discounts. Cash flow is one of the most significant ways of supporting a credit policy. Simply offering lower prices for cash payments can inspire more customers to pay with cash.

2.Keep ample documentation of billing. Sufficient records can make each of the credit lines extended to customers easily tracked, ensuring that late payers can be properly identified, and payment disputes immediately resolved.

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3.Have strict requirements and terms for extending credit. Properly set requirements and clearly laid out terms can ensure that credit lines are extended to customers deemed eligible. The additional requirements involved can even discourage more impulsive buyers from buying on credit willy-nilly.

Businesses can also set up a collections policy to deal with late-paying and nonpaying clients.

Brennan & Clark provides businesses with an array of customized solutions for receivables to make quick work of payment collections. Visit this blog for more updates on collecting from customers.