Does anyone have experience working with Collections Agencies?

Hi,^Searchfunder member‌ - I agree with ^Searchfunder member‌ on the phone calls. If state law allows, you could consider adding a late payment fee to your terms and conditions. If your terms and conditions already provide for a fee, but the business hasn't been applying it, you could start to do so. I've seen some service providers apply the fee on the 31st day, which feels a little draconian to me and not conducive to relationship building. However, applying charges after say 60 or 90 days seems appropriate. ~ Karen

Hey Arleigh, my theory is they are always paying someone and you should be near the front of that line, not the back of it. They pay the utility because they need that service. They can always late pay Office Max and Staples against each other because neither has any leverage. My best suggestion is more phone calls; "hi, we sent out our invoice last week which you should have received. I'm just calling to make sure it's correct and being processed, I'd hate to find out we had a small typo weeks later". Then a week before due date maybe mail a statement reminder or another call; "hi, just a friendly reminder that invoice #1234 is due next week". Or 1 day past due; "Hi, we didnt see your payment, is there any issue we should be aware of?". Or send your sales people in at 30 days. Tie their commissions to prrompt collections. You'll spend more on calls and mailings but 3-6 months of this and you should have a much improved AR profile. It's not that your clients became richer, they are just paying some other schmuck later and you earlier. That's the way it always is with thinly capitalized businesses.


Good luck.