Recouping Past Due Accounts With Third-Party Contractors

1. Recouping Past Due Accounts With Third-Party Contractors Business owners rely on their cash flow to pay their employees, order inventory, and otherwise keep their companies financially afloat. When customers fail to pay their bills, however, business owners' cash flows may be at risk of being depleted. It can take time and effort to collect on past due accounts and also demand resources that owners cannot afford to spare for this effort. Because the money is needed to put back into the company, an owner may find it more prudent to allow a third-party contractor to recoup the obligation on his or her behalf. You can make this determination for yourself by learning how this process takes place. After you have attempted numerous times to collect the debt owed to you and your business, you might then hand it over to a company that can take over the process. The company may first try to make contact itself by sending out letters and making phone calls to the debtor. If contact is made, the business may then try to work out a payment arrangement with that individual. When a payment arrangement is made, the organization might accept an amount that is affordable for the debtor but also allows the organization to make money itself. Most of the funds will be returned to you, however. You may receive reimbursement in monthly increments or when the debt is recouped in whole. Debtors who are unable to make a payment arrangement or refuse to pay at all could be subject to legal action. The organization you hire for the effort could file action in court on your behalf. The action may include having the debtor's wages garnished, bank accounts frozen, or assets seized. The judge or mediator may determine the best course of

2. action based on how much money is owed and what kinds of assets the person has that can be liquidated. The entire process from start to finish could take several months or years, depending on how much is owed to you. During that time, you may be provided with regular updates on the account. You also would not be expected to participate in the efforts. Allowing someone else to take over this effort may work to your advantage if you are busy with your own company and need to focus on its day-to-day operations. You might have meetings to attend, employees to supervise, and communications to manage. You otherwise may lack the time to collect on debts owed to you. You also may not have the temperament or patience to negotiate with people who refuse or are unable to pay. Professional third-party entities have employees who are trained to handle such matters. You avoid the cost of having to hire someone for this task when you outsource it to another agency. Allowing a debt collection service to recoup past due amounts may work to your advantage. You can focus on running your business. The agency can in turn contact debtors, work out payment arrangements, or take legal action if appropriate on your behalf to gain the funds needed for your cash flow. Presented By Boston Commercial