| With recent economic developments, commercial | | | | process of recovering money from a business. There |
| collection agencies have become a necessary part of | | | | is totally different set of rules that commercial |
| any efficient accounts receivable department. The | | | | collectors must follow, and often the debtor they are |
| trickle down effects of the current economic crisis | | | | collecting from is still doing business with the client |
| will be felt for next several years as consumers | | | | who placed the account. Therefore, a commercial |
| struggle to regain financial stability. It is of utmost | | | | collector has to be adept at not upsetting a debtor |
| importance that manufacturers protect themselves | | | | while still managing to recover the money owed. This |
| by utilizing the best and most cost effective | | | | is a bit of a high wire act. Finding just the right |
| collection practices possible. Often, outsourcing past | | | | balance can prove quite difficult, and therefore should |
| due and delinquent accounts can be nerve racking for | | | | be left in the hands of a professional. |
| any treasurer or controller. Many top financial | | | | The most important thing when searching for a |
| executives earned their position through carefully | | | | reliable commercial collection firm is of course money. |
| monitoring their companies receivables and resolving | | | | What kind of rate do they offer? Are there any |
| bad accounts. | | | | upfront costs? Next would be their success rate. |
| But outsourcing delinquent or past due accounts is | | | | Every collection firm tracks its success rate very |
| just the same as outsourcing any other aspect of a | | | | closely and should be able to give at least a few |
| business. If there is an entity that is highly skilled, | | | | referrals. Also of importance is their ability to collect |
| cost effective, and can increase revenue, it is the | | | | internationally. There are only a handful of agencies |
| responsibility of any executive to at least explore the | | | | within the U.S. that can collect worldwide. The reason |
| possibility of partnering. For instance, would you want | | | | for this is that collections are handled very differently |
| your full time employees designing and implementing | | | | in some parts of the world. Often those areas tend |
| your phone system? Unless you were a telecom | | | | to be the most difficult. For instance, Italy has |
| company, of course you wouldn't! There is really no | | | | become known as one of the most difficult regions. |
| difference between outsourcing common things like | | | | And when one thinks about the Italian lifestyle, it is |
| IT and PR and outsourcing receivables. Bad debt is no | | | | not hard to imagine. Honestly, what would you rather |
| longer a infrequent problem, but rather has become a | | | | do, enjoy fine food and wine while basking in the |
| part of life. Especially within the medical device | | | | Tuscan sun, or make sure that your company gets |
| industry, which relies on hospitals across the world | | | | its invoice out on time? Another factor that plays |
| for a majority of its business. As the number of | | | | into the high DSO (date of sale outstanding) in Italy is |
| unemployed grows, so will the number of uninsured. | | | | the way in which the government is set up. Since all |
| This means that a hospitals revenue will be hit hard, | | | | hospitals are publicly owned, bureaucracy can hamper |
| as many patients that are uninsured do not pay. | | | | budgets and not allow invoices to be paid for months. |
| Therefore, many device manufacturers will see their | | | | In a perfect world, everyone would pay their bills on |
| receivables go from 30 to 60 days, which can cripple | | | | time. Unfortunately, we do not live in such a place. It |
| even a large multinational corporation. | | | | is important that companies protect themselves from |
| It is important to note that there is a distinct | | | | a "domino" effect by safe guarding their receivables. |
| difference between commercial collections and retail | | | | It is best that the difficult task of getting a debtor |
| collections. Retail collections are the firms that | | | | to pay on time be handled by a professional agency |
| everyone dreads hearing from. They focus on | | | | that proves to be not only cost effective, but one |
| individuals who have fallen behind or have not paid on | | | | that can walk the "tight rope". Financial executives |
| credit extended to them. Think of the repo man. | | | | most remove whatever negative thoughts the have |
| While necessary, they tend to be more like a trash | | | | regarding collection agencies and see them for what |
| collector, going after the worst and dirtiest accounts. | | | | they are; a valuable tool that can safeguard their |
| Commercial collections on the other hand is a totally | | | | companies cash flow through tough economic times. |
| different ball game. Commercial collections is the | | | | |