It goes without saying, collecting debts is not much fun. Businesses prefer that customers pay their bills on time, and can suffer considerable hardship from late payment and nonpayment of bills. Depending on the nature of the debt and the debtor, a variety of professionals may assist with locating debtors and their assets, and the collection of debts.
Even before a debt becomes delinquent, it may make sense to employ a professional:
Billing Services - A professional billing service can ensure that your bills are sent to clients and customers in a timely manner, can process payments, and can let you know when a bill is overdue. If your company is not large enough to justify having an in-house billing department, or if your work flow varies such that additional assistance is at times required, a professional billing service can help avoid problems with late billing and payment processing.
Early-In Collection Services - When a customer is late paying a bill but you expect that the bill will be paid, it may make sense to hand off the account to an early-in collection agency. These services can analyze the account and debtor and employ pre-collection tactics that they believe will be effective before the bill is reclassified as delinquent or handed off to a collection agency.
Skip Tracers - Sometimes an invoice is returned as undeliverable, and you cannot locate the client or customer who owes you money. While it's usually not a good sign that a debtor has disappeared before paying a bill, a skip tracer can track down the missing debtor so that collection efforts may resume. Skip tracers can also be useful in the event that a customer has provided false or fraudulent information, such as a false name or the use of a mail drop instead of providing an actual business address.
If a debtor does not respond to late notices or letters, or similar lower-pressure debt collection methods, it may be appropriate to use a service that deals with difficult debtors:
Collection Services - Debt collection services may provide a wide range of services, from collection letters to phone calls, to negotiating with debtors.
Collection Law Firms - A debt collection law firm pursues the collection of debts through the courts, first attempting to negotiate a settlement, then proceeding to judgment, and then, as necessary, using judicial collection remedies such as garnishment and execution against assets to try to collect a debt.
Some collection agencies may employ lawyers so that they can offer litigation services in-house.
A credit reporting service maintains records of a debtor's credit history, including late payments and defaults.
Credit Interchange Service - A credit interchange service includes companies in the same industry that exchange information about debtors. If you participate in a credit interchange service you may be able to determine if your debtor is falling behind on multiple accounts, and whether you
Credit Reporting Agencies - Sometimes a negative entry on a credit report will inspire a debtor to pay a debt or negotiate a settlement.
Whether or not you have an in-house credit and collection department, you may create a team of outside credit professionals who can help you manage your invoices and collection efforts and deal with delinquent debtors.