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Providing Creative Solutions to Common Problems
Providing Creative Solutions to Common Problems
Commercial collections, also known as business-to-business (B2B) collections, are much different from consumer collections, often referred to as business-to-consumer (B2C) collections. Often, underlying issues and disputes allow a customer to delay payment or not pay at all.
Maybe the customer is quietly going out of business or about to file bankruptcy. Maybe there is some element of fraud involved. This information must be discovered as soon as possible.
Smaller businesses can’t afford not to get paid promptly. This is even more critical when the amount of money owed is quite large. It can be devastating to a startup or small business if they aren’t being paid on time.
With Southwest Recovery Services, you can simplify the process of collecting commercial debt, create a steady cash flow and ensure your business has the funds it needs when it needs them.
The process used for different types of collections varies by industry.
Commercial collections aim to recover invoices that one business owes to another. The company providing the service sends an invoice from its accounts receivable department to the other company’s accounts payable department.
The business that sends the invoice expects the receiving company to pay within the contractually stated time frame. “Net 30” is a common contract term, meaning that the company has 30 days from receiving the invoice to make the payment and still be in good standing. When a long time passes without payment, the business may turn to in-house collections or send the debt to an outside collections agency. In either case, the goal is to get the company to repay the invoice through collections.
Businesses need a steady cash flow to keep their operations running. When a business lacks the cash flow to pay its regular operating costs, its expenses may quickly exceed its income. Despite the need for steady cash flow, collecting from businesses takes time and effort. The commercial collections specialists at Southwest Recovery Services aim to ease the debt collection process to keep funds moving.
Here are the main ways commercial collections are different from consumer ones:
Debt collection is crucial to business operations as it allows companies to maintain their cash flow to fund daily operations. At Southwest Recovery Services, our debt collections process involves these steps:
Since every financial situation is unique, we have a few debt recovery strategies to address the specific circumstances of the debt. As a top commercial debt collection agency, we use the following debt recovery strategies:
Evaluating risk is a significant part of debt collection, and understanding as much as possible about the businesses owing you money allows us to group each case based on how likely they are to complete their payments. We can also use your segment data to determine which collection tactics to use. For example, businesses with a good track record of repaying commercial debt can receive reminders, those with a medium risk may undergo proactive steps, and high-risk companies need strong tactics and possible legal action.
Businesses struggling with paying their debt aren’t always trying to avoid paying at all. In many cases, they may be struggling financially or at risk of bankruptcy. To increase your chances of successful repayment, we can offer customized payment options so the business can regain a feeling of control as they complete the commercial collection process.
Whether you work with one or 100 businesses, knowing which accounts are of higher priority than others is vital to ensuring timely debt collection. Our debt collection system will help avoid lengthy discussions and help our collection agents expedite the process.
While we may be dealing with commercial debt collection, positive customer relationships are still vital for the overall process. This approach can involve listening to concerns and working with a business to develop a repayment plan that works for both parties.
A great way to improve the debt recovery process is to incentivize timely payments. This process can involve tactics like loyalty discounts or rewards for paying on time. Or, we can explore options like offering bonuses for each referral.
Legal action should always be a last resort in any debt collection process. Before we take legal action, we will have you consult with our legal professionals to understand your options and possible outcomes.
Commercial debt collection is complex. Having a professional partner can ease the process.
Most companies lack the resources, infrastructure or time to resolve complicated account issues. They need to focus on their core business, which is selling products and providing services.
A professional B2B debt collection agency will have staff with the education and negotiation experience needed to work through complicated accounts and significant financial problems. Disputes with purchase orders, invoices, returned products, sales tax and freight charges may slow the collection process down. Effective negotiation, mediation and sometimes arbitration are necessary for debt collection.
Commercial debt collection is a delicate process that, if done correctly, can allow you to maintain a positive B2B relationship. Some ways we can complete a successful debt collection without compromising business partnerships include:
Establishing trust starts with open and honest communication. This can involve us setting clear and defined payment terms and credit periods and determining whether to impose any penalties for late payments.
Establishing terms also helps avoid unnecessary disputes that strain relationships. Another strategy is to provide space for the consumer to dispute any debts. These two strategies safeguard existing partnerships and lay a greater foundation for future collaborations.
Since debt collection is a people-focused process, there may be times when it goes from professional to personal. By maintaining professionalism throughout the negotiation process, we can continue fostering an atmosphere of understanding. For example, keeping things polite and acknowledging a shared history between you and the company engaged in consumer debt can help the client remain satisfied and continue doing business with your company.
Legal action should be a last resort after exploring all options for amicable reconciliation. Before exploring a lawsuit, we consider the implications for both parties’ reputations and the potential strain on future collaborations. Our team can review your contract to ensure you have a solid foundation for pursuing legal action.
Partnering with an outside commercial collection agency is highly recommended. Our agency staff will have the education and negotiation experience to work through complicated accounts and large financial problems.
Southwest Recovery Services understands how to effectively assess and manage commercial accounts for companies from almost every industry, whether small or large. Our success rates are well above the industry average due to our highly trained agents who specialize in business-to-business collections and the collection and resolution of large debts. Plus, we know how to work through issues and get accounts resolved without risking the market reputation of our clients’. We are professional and ethical and get the results you need.
In Southwest Recovery Services, you have a reliable partner that enhances your debt collection process and keeps funds moving through your business. We use technology to provide a better experience for businesses that come to us for collections. An online portal lets you see real-time activity in the debt collection process. It also allows for secure file exchange and other benefits, enabling you to check in on debt collection anywhere.
Wherever your commercial business operates, Southwest Recovery Services can assist with collections. We’re known nationwide for our debt collection approach, and we serve customers from 11 locations across the country:
Southwest Recovery Services provides commercial and consumer debt collections nationwide from our offices across six states. Our expertise allows us to meet the challenges of this industry. We manage collections so you can focus on other core business activities.
Reach out to our team to learn more about our commercial collections expertise.