I am seeking feedback and recommendations on collections agencies specializing in B2B. I would like to try this approach before writing these off as bad debt. I do not have much experience with external agencies and any experiences and advice you could share would be greatly appreciated.
B2B Collection Agencies
Answers
Start with a Proformative site search. I just searched "collection" using the box in the top right and it came back with 11 Discussions, 10 Blogs, 3 Resources, 2 Providers and 2 Events. They seem to have launched a crazy new search capability here! Try it and see if that helps you with some strategies as well as the providers in the B2B Marketplace. If you still have questions, post them here. Also, if anyone else has recommendations for collections service providers that they recommend, by all means throw them in this discussion!
I've always been a DIY collections guy, but if you need to twist arms, it can be nice to use a third party for it. It removes the headache and also distances you and your company from the process, thereby reducing bad feelings between you and your customers.
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I highly recommend Emergency Receivables Doctor, LLC at http://www.icollectandconsult.com/index.html if you need help from an outside agency. The owner, Debie Batterson, used to run my internal C&C for a $100 million nationwide company that happened to be based in Seattle, WA. Debie is the most creative credit & collections person I've had the pleasure of knowing in 30+ years in finance. Totally professional, polite, persistent. She drives results and retains customers while getting paid. Can't say enough good things about her.
This is definitely something to try before just writing off, but be careful. Even though your clients aren't paying you, they are still clients so you probably want the collector to treat them in a manner consistent with your own biz principals, i.e., when you screen collectors, talk to them about approach and how they do things. Also, you will find a couple options: outright sell the invoice at a discount vs. collectors who call on your behalf. Perhaps talk to some of each and weigh the pros/cons for your particular situation. Good Luck!
Thank you for your comments. I wholeheartedly agree with the tentative use of agencies. I have never used them before for those very reasons. I will be limiting collection actions to clients who we will be refusing to work with in the future and who show no willingness to meet halfway. As a matter of policy and customer service we like to reach out to customers and allow them to request extended terms, different payment options, installments, etc. I feel we are obliged to work with customers who are honest about the difficulties they are facing. It is always my goal to enable other businesses to succeed. You can call it financial karma I guess!
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I could not agree more with your flexible approach to working with your good clients!
I worked in B2B collections for a very large US telecom company. There are dozens of good, reputable collection agencies that can help you. Of course, there are also many not-so-good companies. You want a firm that is experienced in your industry and can offer references from other clients. You also want to visit the actual center that will be doing the calls for you. Generally, you will get a much better return from a collection agency than from selling your receivables.
Having been in Credit & Collections in many roles since 1977, I have a few gray hairs of experience. You are welcome to contact me at [email protected] and I can help a bit I'm sure. Sometimes,other considerations might play in, for example, BPO - outsourcing - might just pay for itself by lower people cost, but the real deal is getting the cash in faster and preventing the aged items. Quicker cash, capital costs down. Thanks
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