Continue Trying to Collect Internally:
- Pros: Perceived cost savings and staff knowing customers personally
- Cons: With strain on staff and customer rapport, your chances of recapturing receivables has very small rate of success and often result in all-out customer loss!
- Pros: An attorney-written letter can often scare the toughest of debtors into paying.
- Cons: It comes at a high up front cost, with alienation almost inevitable. Most corporate attorneys are not experts in collection law.
- Pros: Time-tested tactics, often with a full team at your disposal.
- Cons: Rates between 33-50% per account collected, with a recovery rate of just over 15% on average.
Flat, Fixed Fee Philosophy:
- Pros: A low price, typically less than 10%, with non-alienating contacts and consistent professional follow through. This method promotes healthy A/R and customer retention, and boasts most of the pros from the other methods.
- Cons: None from our perspective :)
We’re obviously a little biased as to what works best, but as experts, we’ve seen it all. There are definitely options for re-capturing that income, with advantages to each. The best way to make the choice for your business is to think about what pillars are important to you: Recovery, Cost, and Alienation. Don’t wait for the reality to set in on your outstanding accounts!
TekCollect provides the most advanced accounts receivable, collections, and client retention services available. To learn more about us, visit our website and follow us on Facebook and Twitter.