B2B collections are a tricky business. Strategies for commercial collections can vary considerably depending on the specific situation and the particular relationship with the client who owes the debt. In some scenarios, overdue balances can cause rifts in essential business relationships; as such care must be taken to ensure no damage to existing partnerships is incurred while accounts are brought to resolution. In other cases, litigation may cause repercussions in the business community and have an impact on a company’s brand image, even though there is clear justification for legal action. Finally, there may be situations where swift and firm tactics are required.
Employing a professional collection partner skilled in a variety of B2B collection approaches can ease much of the burden and shield companies from distraction while recuperating unfulfilled contract agreements and lingering B2B debt.
An experienced collection partner can serve as a mediator and ensure an amicable and legal resolution process. They can assist in protecting the delicate B2B client relationship by acting as an outside party who provides structure and a set of pre-established terms. This insulates the business that is owed from any negativity that may develop as a result of collection attempts and eliminate the likelihood of requests for “special treatment.” Credit reporting that agencies provide can also be a motivating factor for payment that businesses would not otherwise be able to use as leverage. And if legal action is necessary, an agency with an efficient case management process and experienced attorneys can resolve the debt most effectively.
Aside from having an arsenal of techniques for handling delinquent accounts, collection agencies have greater resources for managing these accounts. Issuing demand letters, conducting additional outreach through multiple channels, skip tracing and documenting activity on past due accounts requires a lot of time and resources that are impractical for most businesses to take on in addition to their primary function. Hiring a collection partner can be more cost-effective than attempting to collect on these accounts in-house. In addition, professionals experienced in commercial collections are well versed in the idiosyncrasies of pursuing legal intervention. Businesses can benefit from use of their in-house legal teams representing the case on their behalf and providing the evidence necessary for issuing a judgment or managing a settlement agreement.
Regulations that guide the collection process for consumers, such as the FDCPA, don’t apply to commercial collections — but that doesn’t mean that the same care and thoroughness shouldn’t be taken with the delinquent accounts from business relationships. B2B collections are high stakes: client relationships and a company’s reputation in the community take a long time to establish and the balances from these types of delinquent accounts can be very high. Commercial collections should be approached with caution and the most effective way to ensure this is with the help of a professional collections partner.