What Do All Businesses Have In Common?
- They extend credit or accept checks.
- A portion of their accounts become delinquent and some checks bounce.
- They have, for the most part, an effective, sophisticated in-house collection procedure to attempt to recover these receivables.
- In spite of these efforts, a percentage of the past due receivables are not collected within 90 days. (See Collection Trends.)
- As a last resort they eventually increase in-house pressure, at an exorbitant cost, or assign these accounts to professional collection firms.
Why use Commercial Recovery?
We have a process, and the systems and people to drive it, that attack the root causes of the devaluation of receivables. Research shows there are two main factors that inhibit the conversion of receivables into cash:
- The single most important factor is age. Accounts deteriorate in collectability at an average rate of 10% per month, bad checks at a rate of 25% per month.
- The second factor is the priority debtors place upon the payment of the bill. The lower the priority the lower the commitment to pay.
So recovery is a psychological process wherein the age of the account is inversely proportional to the commitment to pay it — the greater the age, the lower the commitment, and the less likely anyone will collect it. Creditors cannot just hope that their debtors are going to pay. What works is timely and proactive follow-up with sophisticated techniques, which motivate debtors to resolve their outstanding accounts quickly. We bring all this to bear in our services.
What Can Commercial Recovery Do For Businesses?
- First, with proper usage and application of our services, we can save a business 20% to 50% of the in-house billing and collection cost.
- Second, we recover more of their delinquent receivables than they can obtain by any other means, either continued in-house effort or the use of a professional collection firm.
- Third, we collect their money faster, which dramatically accelerates their cash flow.
- Finally, we do this by only charging a low percentage on actual cash collected on the claim. That means: No Collection = No Cost.
Why Are Our Results So Vastly Superior?
It is important to understand why we can collect money that continued in-house effort would NOT recover. In the collection industry, it is called “Third Party Intervention” and consists of three distinct elements:
- Intensified Demand. Debtors believe, rightly so, that we have resources beyond those available to other businesses and the time to follow the account properly.
- Implied Effect on Credit Standing. Third party involvement implies a credit rating may suffer and that legal action may be instituted.
- Negative Image of Other Agencies. Some collection agencies are perceived as relentless and utterly serious about collecting money. Our services are thorough and serious but in a very professional manner. We realize that if you treat the debtors respectfully they are much more likely to pay than not pay.
All our services are totally automated and the computerization of the process allows our staff to concentrate on each and every account. No matter the balance or volume we handle every account as if it is the only one we have. This personal thoroughness means more accounts are turned into cash in a quicker time frame and disputes are quickly resolved, clearing the way for cash recovery. More and quicker cash recoveries mean better cash flow and profits for your business.