The collection of commercial debt--debt one business owes another business--consists of a fairly costly process when that collection is handled within the creditor company's own subdivision. The process of debt collection itself is often time-consuming as well. However, there is another option: a third-party firm that specializes in such delinquent debts. These debt collection agencies (DCAs) are licensed entities that perform legal and ethical debt collection services often at greater speed and at less expense.
A DCA concentrates its debt collection efforts on the debtor company's financial and accounting departments. The DCA prioritizes unsecured corporate debts--those lacking collateral such as purchase loans and unpaid bills--and uses debt attorneys and agents who will initiate communication and begin performing tracing services. The debt attorneys and agents will also prepare screening profiles of the debtor company. The DCA will offer to settle the debt owed for a reduced amount, locate assets that are subject to seizure, and whenever necessary seek to obtain a settlement in court. The DCA is able to arrange payment plans at any stage in the process.
The collection cost will consist of all expenses in the collection process including debt attorney and agent fees. Fee structures vary: some DCAs charge upfront, others use a pay-as-you-go scheme with weekly or monthly fees, and yet others charge only after successful debt collection. Clients can anticipate fee ranges between 15-25% of the amount that gets recovered.
Commercial debts can hamper a business's operations. Fortunately there are debt collection agencies that are specialized in following debtor businesses and in formulating payment plans on your behalf. These debt collection agencies can resolve delinquent payments at lower costs and with greater speed than the creditor business usually can, and in many instances will only charge when successful.
