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Old 03-02-2012, 11:51 AM   #1
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Sending Customer Invoices to "Collections"

Just have a few questions on collection agencies:

1. when you owe a vendor money for a long time, and they say "pay it off or your invoice will be forwarded to a collections agency", what usually happens if it does get sent to collections?

and the other way around

2. if you have an account that you think is not/ can not pay off their debt, and is deemed unrecoverable (willl not pick up your phone calls/answer to voicemails/emails), what can you do to recover the amount owing to you? Is going to a "collections agency" worth the time and effort?
FYI invoice owing is approx. 800$
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Old 03-04-2012, 12:17 AM   #2
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It depends on the company. To answer your questions:

1. I used to work as an A/R. If the amount is substantial enough to the company then we usually forward the outstanding invoices to the collection agency. Now I don't really know what happens afterwards but I'm sure they'll do their job (calling customers until they pay or maybe threaten lol....I've had customers calling back to me saying they've been "chased" etc). I used to process the cheques we receive from collections.

2. If the amount is not that substantial to the company, we write them off. As simple as that. $800 PERHAPS means nothing to a company like BCHydro etc but it might be considered significant to other smaller companies (just an example). You might also want to consider if they will also apply interest if it's unpaid after a certain period of time, just be aware.

Hope it helps.
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Old 03-04-2012, 09:50 AM   #3
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thanks..

i heard collections take a huge chunk out of your customer's invoice as payment?
Also, which collections company did you use? I might look into this option
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Old 03-04-2012, 03:32 PM   #4
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I wouldn't bother using a collection agency unless you want to be paid out pennies on the dollar for the bad debt. It would be easier to have your inhouse lawyer to send them a letter demanding payment.
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Old 03-04-2012, 04:24 PM   #5
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In my past experience, we use CA only with the worst expected.

As a matter of fact, many of the cases that we used CA, we already considered those revenue lost. So, whether or not CA recollects them, it didn't really matter to us.

Just to give you an idea how we think a case worth of CA.
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Old 03-04-2012, 10:55 PM   #6
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Quote:
Originally Posted by Ruff Ryd@s View Post
thanks..

i heard collections take a huge chunk out of your customer's invoice as payment?
Also, which collections company did you use? I might look into this option
Yes the cheques we collect are after commission but I don't know exactly how much (percentage wise). The company I used to work for uses CSI and Wiggins.
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