How to Enhance Your Cash-In and Cash-Out Flows

Efficient cash flow management is vital for the success and stability of any business. It encompasses effectively managing the movement of cash into and out of a company, as well as maintaining an adequate amount of cash on hand.

In this blog post, we will explore the significance of cash flow, its differentiation from profit, and provide valuable insights and strategies for business owners to optimize it. Additionally, we will discuss the importance of implementing effective AR collections policies and highlight the benefits of seeking assistance from professional collections firms.

What Is Cash Flow? (Cash-In, Cash-Out, and Cash-On-Hand)

Cash flow refers to the inflow and outflow of cash within a business. It comprises three key components: cash-in, cash-out, and cash-on-hand.

Cash-In: This represents the money flowing into the business from various sources, including sales revenue, loans, investments, or any other form of income. It is crucial to accurately track and manage cash-in to ensure a healthy cash flow.

Cash-Out: Cash-out refers to the money leaving the business, encompassing expenses such as operational costs, payroll, rent, inventory, and debt payments. Monitoring and controlling cash-out is essential to maintain profitability and cash flow stability.

Cash-On-Hand: Cash-on-hand represents the amount of money available in the business at any given time. It serves as a financial buffer for unforeseen expenses or cash flow gaps. Maintaining an optimal level of cash-on-hand is crucial to avoid liquidity issues and maintain business operations.

Why Is Cash Flow So Important?

Cash flow plays a pivotal role in the financial health and sustainability of a business. Here’s why it is crucial:

Operating Capital: Positive cash flow ensures that a business has sufficient capital to cover day-to-day expenses, such as salaries, utility bills, and inventory purchases. It allows for uninterrupted operations and fosters business growth.

Debt Servicing: Adequate cash flow enables timely payments towards debts, loans, and other financial obligations. This enhances the business’s creditworthiness and reputation among lenders, facilitating future borrowing if necessary.

Investment Opportunities: A healthy cash flow position provides the flexibility to seize growth opportunities, invest in research and development, expand into new markets, or acquire assets. It empowers business owners to make strategic decisions that drive long-term success.

What Differentiates Cash Flow From Profit?

While profit is a fundamental aspect of business, it should not be confused with cash flow. Profitability refers to the excess of revenue over expenses, while cash flow focuses on the movement of cash within a business. Here’s how they differ:

Timing: Profit is based on accrual accounting, which recognizes revenue and expenses when they are incurred, regardless of when cash is exchanged. Cash flow, on the other hand, focuses on the actual inflow and outflow of cash, considering the timing of receipts and payments.

Non-Cash Transactions: Profit may include non-cash items such as depreciation or amortization, which do not affect immediate cash flow. Cash flow, however, excludes such non-cash expenses.

Liquidity: Profitability does not guarantee liquidity. A business can be profitable but still face cash flow issues if it is tied up in accounts receivable or inventory. Cash flow management ensures that the business has sufficient liquid funds to meet its obligations.

Need Professional Assistance Maximizing Your Cash Flows?

Staying on top of cash-in and cash-out is hard, especially if your business has been experiencing rapid growth recently. If you think you need assistance with your AR, we encourage you to check out our shared AR services. Our goal is to get your business running efficiently so you can maximize your profits—learn more below.

Learn How Shared AR Can Maximize My Business’s Cash Flow

What Business Owners Can Do to Optimize Their Cash Flows:

Now that we understand the importance of cash flow and its distinction from profit, let’s explore strategies to optimize cash flows for business owners:

  1. Monitor Spending: Regularly review and analyze expenses to identify areas where cost reductions can be made without compromising the quality or efficiency of your operations. Look for opportunities to negotiate better pricing with suppliers, explore alternative vendors, or implement cost-saving measures.
  2. Calculate Cash-In vs. Cash-Out: To gain a clear understanding of your cash flow, diligently track your cash-in and cash-out activities. Utilize statements and financial software to monitor patterns, identify potential gaps, and make informed decisions regarding revenue generation and expense management.
  3. Improve AR/Collections Policies: Acquiring effective accounts receivable and collections policies can significantly impact cash flow. Streamline your invoicing processes, set clear payment terms, and establish a proactive collections system. Regularly follow up with customers regarding outstanding payments and implement timely escalation procedures if necessary.
  4. Offer Incentives and Payment Options: Encourage prompt payments by offering incentives such as early payment discounts or rewards programs. Additionally, consider providing multiple options to accommodate customer preferences, including online payments, credit cards, or automated recurring billing.
  5. Establish Relationships With a Professional Collections Firm: Outsourcing collections to a professional firm can alleviate the burden of managing overdue accounts while optimizing your cash flow. These firms have the expertise and resources to efficiently recover outstanding debts and improve your collections KPIs.
  6. Implement Cash Flow Forecasting: Cash flow forecasting involves projecting your future cash inflows and outflows based on historical data and anticipated business activities. By accurately predicting cash flow fluctuations, you can proactively plan for surplus or deficit periods, ensuring adequate cash reserves or arranging necessary financing.
  7. Negotiate Vendor Terms: Negotiating favorable terms with suppliers can positively impact cash flow. Explore options such as extended payment terms, volume-based discounts, or consignment agreements to improve your cash conversion cycle and enhance working capital efficiency.
  8. Optimize Inventory Management: Proper inventory management is essential for cash flow optimization. Avoid overstocking, which ties up capital, and implement inventory control systems to ensure optimal levels based on demand. Consider just-in-time inventory practices or adopting drop-shipping arrangements to minimize inventory holding costs.
  9. Strengthen Customer Relationships: Building strong relationships with your customers can positively impact cash flow. Deliver exceptional customer service, provide transparent communication, and understand their payment preferences and financial constraints. This approach encourages timely payments and fosters long-term loyalty.
  10. Seek Expert Financial Advice: If you’re facing persistent cash flow challenges, consider seeking advice from financial professionals or consultants. They can provide valuable insights, identify areas for improvement, and assist in implementing tailored strategies to optimize your cash flows.

What is Shared AR?

Summarizing What You Need to Know About B2B Collections and Cash-In and Cash-Out Flows

Optimizing cash-in and cash-out flow is crucial for the financial stability and growth of any business. By implementing effective strategies such as monitoring spending, calculating cash-in versus cash-out, improving AR collections policies, and seeking assistance from professional collections firms like Rapid Collections, business owners can enhance their cash flow management.

Don’t let cash flow issues impede your business’s potential. Take proactive steps to optimize cash flows, and reach out to us to leverage our professional collection services and shared AR assistance, ultimately improving your business’s financial health and stability.

Hitting the Books: Debt Collecting Terminology and Definitions

Want to know what you’re talking about before you get in touch with a professional commercial collection agency? Get educated on the most common debt collection terms, language, and slang with this compendium. Consider this your master resource for all things debt collecting!

Debt Collecting Terms That Start With “A”

  • Abusive Language: The use of profane, offensive, or insulting language to a debtor or third party when attempting to collect a debt. Abusive language is illegal and strictly prohibited by the Fair Debt Collection Practices Act (FDCPA).
  • Account: The record of all information regarding an individual or company’s financial accounts, including past payments, current balances, and other relevant information.
  • Accounts Payable: A record of all money owed by a company to its suppliers, vendors, or business partners.
  • Accounts Receivable: A record of all money owed to a company by its customers.
  • Accrued Interest: Interest that accumulates on debt over time until it is paid off.
  • Administrator: A third-party debt collector hired to manage the collection of a company’s debts.
  • Administration Order: A court order that sets the terms and conditions of a debt repayment plan.
  • Arrears: Money that is overdue or past due.
  • Audit: An examination of a company’s accounts and financial records to check the accuracy of its payments and collections.

Debt Collecting Terms That Start With “B”

  • Bacs: A system used to transfer money electronically between banks.
  • Bad Debt: A debt that is unlikely to be paid off in full.
  • Bad Debt Relief: A form of tax relief that allows companies to write off a portion of their bad debt.
  • Balance Sheet: A financial statement that lists a company’s assets, liabilities, and equity.
  • Bankruptcy: A legal procedure whereby a debtor is declared insolvent and their assets are distributed to creditors.
  • Better Business Bureau: A nonprofit organization that assists consumers in resolving disputes with businesses.
  • Business Restructuring: The process of reorganizing a company’s operations to improve its financial position.

Debt Collecting Terms That Start With “C”

  • Cash Flow: The amount of money coming in and out of a business.
  • Cease Communication Letter: A letter sent to a debtor indicating that all future communication should be directed to the debt collector or attorney.
  • Charge: A fee charged by a debt collector for their services.
  • Collection: The process of attempting to collect a debt from a debtor. This can include contacting the debtor, negotiating payment arrangements, and taking legal action if necessary.
  • Collection Fees: Fees charged by a collection agency for their services.
  • Collection Letter: A letter sent to a debtor informing them that they owe money and requesting payment.
  • Collector: A person or company responsible for collecting debts from debtors.
  • Commercial Collection Agency: A company that specializes in collecting commercial debts from businesses.
  • Contract: A legally binding agreement between two or more parties.
  • Consumer Financial Protection Bureau (CFPB): A federal agency responsible for regulating consumer financial products and services, including debt collection.
  • Contractual Fees: Fees charged as part of a contract between two or more parties.
  • Credit: The process of obtaining goods or services in exchange for a promise to pay at a later date.
  • Credit Fees: Fees charged for the use of credit, such as interest and late payment fees.
  • Credit Report: A record of an individual’s credit history, including payments, defaults, and other financial activities.
  • Credit Terms: The details of a credit agreement, such as the interest rate, payment terms, and repayment schedule.
  • Creditor: A person or organization that is owed money by another person.

Debt Collecting Terms That Start With “D”

  • Days Sales Outstanding (DSO): A financial ratio that measures the average number of days it takes to collect payments from customers.
  • Debt: Money owed by one person to another, usually as a result of a loan or credit agreement.
  • Debt Relief Order: A court order that allows an individual to have their debts frozen for up to a year, during which time they will not have to pay any interest or fees on those debts.
  • Debt Restructuring: The process of renegotiating a debt with a creditor to lower the amount owed or extend the payment period.
  • Debt Settlement: A process by which a debtor agrees to pay a portion of their debt to satisfy the entire amount owed.
  • Debtor: Someone who owes money to a creditor.
  • Default: When a debtor fails to make payments according to the terms of their loan agreement.
  • Default Notice: A written notice sent to a debtor when they have failed to make payments according to the terms of their loan agreement.
  • Delinquent: When a debtor fails to make payments on time.
  • Dispute: When a debtor disagrees with the amount owed or the validity of a debt.

Debt Collecting Terms That Start With “E”

  • Exempt Funds: Money that cannot be garnished from a debtor. This includes social security payments, supplemental security income (SSI), and certain other types of benefits.
  • Exempt Income Protection Act: A federal law that protects debtors from having their wages or other income garnished.

Debt Collecting Terms That Start With “F”

  • Factoring: A type of debt collection where a third-party company buys out a business’s debt at a discounted rate in exchange for immediate payment.
  • Fair and Accurate Credit Transaction Act (FACTA): A federal law that protects consumers from identity theft and other forms of fraud.
  • Fair Credit Reporting Act (FCRA): A federal law that governs the accuracy, fairness, and privacy of consumer credit reports.
  • Fair Debt Collection Practices Act (FDCPA): A federal law that regulates the activities of debt collectors and protects consumers from unfair or abusive practices.
  • Fake Debt: The practice of attempting to collect on a debt that is not owed and does not exist.
  • Federal Trade Commission (FTC): The federal agency responsible for administering and enforcing laws related to consumer protection and fair debt collection practices.
  • Forward Dating: The practice of placing a date on correspondence before it is sent out.  This practice is illegal in many states, as it can be interpreted as an attempt to deceive the consumer into believing the correspondence was sent out earlier than it actually was.
  • Fraud: The intentional act of deceiving a consumer for the purpose of obtaining their personal information or money.

Debt Collecting Terms That Start With “G”

  • Garnishments: A legal action taken by creditors to collect a debt. It is usually done through a court order and requires the creditor to take a portion of the debtor’s wages or other assets to pay back the debt.
  • Guarantees: A contractual agreement between two parties in which one party agrees to assume the financial responsibility for a debt incurred by the other party.

Debt Collecting Terms That Start With “H”

  • Harassment: The act of making persistent, unwanted contact with a consumer to pressure them into paying off their debt. This can include frequent phone calls and letters as well as threats of legal action.
  • Hearing: A legal proceeding where a judge will listen to arguments from both parties involved in the dispute and make a ruling. This is often used when the debtor has failed to pay the debt or when they are disputing the amount owed.

Debt Collecting Terms That Start With “I”

  • Informal Arrangement: A payment plan set up between the debt collector and the debtor that does not involve legal action. The plan is informal in nature and based on an agreement between the two parties.
  • Initial Writ: A document issued by the court that informs the debtor of their obligation to pay a debt and of the legal action that can be taken if they fail to do so.
  • Insolvency: The inability of a debtor to pay their debts due to a lack of funds.
  • Interest: A fee charged by a creditor to compensate them for the use of their money.
  • Invoice: A document issued by a creditor to the debtor that details the amount of money owed and due.
  • Itemization: A detailed listing of all individual items that make up a debt.

Debt Collecting Terms That Start With “L”

  • Late Payment: A payment that is not made by the due date specified in the terms of the loan.
  • Letter Before Action (LBA): A legal letter sent by a creditor to the debtor informing them of their debt and demanding payment.
  • Limited English Proficient: A person who does not speak English fluently and is therefore unable to effectively communicate with debt collectors.
  • Liquidation: The process of converting a debtor’s assets into cash to pay off their debt.
  • Liquidator: A person or company appointed to manage the liquidation of a debtor’s assets.

Debt Collecting Terms That Start With “M”

  • Mini-Miranda Warning: A statement given by a debt collector to a debtor informing them of their rights under the Fair Debt Collection Practices Act.
  • Misrepresentation: Making false or misleading statements to a debtor to collect a debt.

Debt Collecting Terms That Start With “N”

  • Nominee: A third party appointed to receive payment from a debtor on behalf of a creditor.
  • Non-Recourse Facility: A type of loan facility in which the lender has limited or no recourse against the borrower, typically in cases where the collateral is of greater value than the amount of debt being borrowed.

Debt Collecting Terms That Start With “O”

  • Order-to-Collections Process: A process whereby a creditor assigns an account to a third-party debt collector. The debt collector then sends out a collection letter and attempts to contact the debtor to collect the debt.
  • Original Creditor: The creditor who initially extended credit or services to the debtor.
  • Outstanding Balance: The amount of money the debtor still owes to the creditor after all payments have been made.

Debt Collecting Terms That Start With “P”

  • Party/Parties: A person or entity involved in a legal transaction.
  • Payday Loans: Short-term loans often used as a last resort by consumers who cannot get access to more traditional forms of credit.
  • Phantom Debt: Debt that the debtor does not owe but is being claimed by the debt collector.
  • Pleadings: Documents filed in a court of law that outline the parties’ legal claims and defenses.
  • Preferential Creditor: A creditor who is paid out first before other creditors in the event of a bankruptcy or liquidation.
  • Principal: The amount of money originally borrowed, not including interest or fees.
  • Proof of Debt: Documentation used to prove that a debt exists and must be paid.
  • Proof of Delivery: Documentation that confirms a debt collection letter was sent to the debtor.
  • Proxy: A person who is authorized to act on behalf of another person.
  • Proxyholder: A person appointed to act on behalf of another in debt collection matters.

Debt Collecting Terms That Start With “R”

  • Receiver: A person appointed by a court or other authorized party to take control of, manage, and administer the assets of a debtor.
  • Receivership: A court or other authorized party action to appoint a receiver to take control of, manage, and administer the assets of a debtor.

Debt Collecting Terms That Start With “S”

  • Sales Ledger: A list of all outstanding debts owed to a company.
  • Secured Creditor: A creditor who has security for their loan. The security can be in the form of a mortgage, charge, or pledge over assets or goods.
  • Set-Aside Judgment: A set-aside judgment is a court order that allows a debtor to pay back the debt in installments over time as approved by the court.
  • Settlement Agreement: A settlement agreement is an arrangement between a creditor and debtor that allows the creditor to receive less than the full amount of the debt in exchange for the debtor paying a lump sum.
  • Small Claims: Small claims are court proceedings for collecting a small amount of money owed, typically up to $3,000.
  • Statute of Limitations: A law that sets a time limit for creditors to collect on certain debts. After the statute of limitations has expired, creditors can no longer legally pursue collection of the debt.
  • Statutory Demand: A formal request for payment of an undisputed debt. It is usually sent by a creditor to a debtor and can be used as evidence in court that the debt is owed.
  • Substantiation of a Debt: The process of providing evidence that a debt is owed. This can include a copy of an invoice or statement showing the amount due and when it was incurred.
  • Summary Clause: A provision in a contract that states the amount of money owed, the terms of payment, and any penalties for late payments.
  • Summons: A legal document issued by a court or other authority that orders an individual to appear in court and answer a complaint.

Debt Collecting Terms That Start With “T”

  • Time-Barred Debt: A debt that is past its statute of limitations and thus unenforceable in court.
  • Token Payments: Small payments made by a debtor to show that they are trying to pay off their debt.
  • Tradeline: A line of credit that appears on an individual’s credit report.

Debt Collecting Terms That Start With “U”

  • Unsecured Creditor: A creditor that does not have the right to seize a debtor’s property in case of nonpayment.

Debt Collecting Terms That Start With “V”

  • Validation Notice: A document sent by a debt collector to a debtor that contains information about the debt and the rights of the debtor.
  • Verification of a Debt: The process of confirming the accuracy of a debt and its associated information.

Debt Collecting Terms That Start With “Y”

  • Year-End Closing: The process of finalizing a company’s financial statements at the end of their fiscal year. This includes reconciling accounts, preparing financial statements, and other duties related to closing out the books.

Debt Collecting Terms That Start With “Z”

  • Zombie Debt: A debt that has been sold or transferred to a third-party collections agency after it was written off by the original creditor. It is also referred to as time-barred debt because it is usually past the statute of limitations.

Too Much to Wrap Your Head Around? Let Rapid Collections Handle It

If all of this information has left your head spinning, it’s time to call in the professionals. Rapid Collections is a leading global collections agency that can help you manage and collect on your delinquent accounts. Our experts have years of experience in the industry and are trained to handle even the most difficult debt collection cases. We understand the nuances of the industry, so we can customize solutions that will fit your needs. 

Don’t let debt collecting leave you feeling overwhelmed. Contact Rapid Collections today and let us handle the hard work for you.

Debunking the Myths Around B2B Collections

Business owners often worry about working with a debt collection agency to help them recover funds. Maybe they’ve heard horror stories from other companies. Perhaps they fear that outsourcing collections will damage their business’s reputation or incur other great costs.

In reality, partnering with a professional and experienced B2B debt collection agency can be hugely beneficial for any business. In this blog post, we’ll debunk the myths around commercial debt collection and explain why an agency can benefit you and your business.

Reframing the Perception of Debt Collection Agencies

Let’s start by reframing the perception of debt collection agencies. In truth, these organizations exist to help businesses get paid promptly and safely without jeopardizing their reputation or incurring unreasonable costs. Good debt collectors are highly professional and understand the importance of establishing trust between themselves and their clients; they know that getting the job done means more than just acquiring money—it also involves safeguarding your business interests.

Busting 5 Myths About B2B Collections

Now that we better understand the reality behind debt collection agencies in general, let’s review some of their specific myths and bust them.

Myth 1: Debt collection agencies are expensive.

Good debt collection agencies like Rapid Collections provide affordable services and will work out payment plans that are suitable for your business needs. They also work on contingency, meaning you don’t pay anything unless they successfully recover the funds owed to you.

Myth 2: Debt collection agencies damage my reputation.

A reputable debt collection agency will be respectful and use best practices. They will not be overly aggressive, and they will always abide by the law. By utilizing their services, you will not only preserve your reputation, you can improve it by maintaining standards of fairness. Also, you will finally get your money back.

Myth 3: Working with a debt collector will insult my clients.

A debt collection agency will never disrespect your clients in any way. The only goal is to recover the debt and they do this by being professional, respectful, and patient. They understand that people can fall on hard times and will work with them to settle their debt amicably.

Myth 4: Working with a debt collection agency is complicated.

Utilizing a reputable debt collection agency like Rapid Collections can be surprisingly straightforward, as most agencies have streamlined processes that make dealing with debt stress-free.

Myth 5: Debt collectors use unethical tactics.

In reality, reputable debt collection agencies abide by stringent industry regulations that ensure the ethical and professional treatment of debtors.Collectors are not allowed to use aggressive tactics in any shape or form, but instead rely on effective communication to successfully collect their debts.

Interested in Working With a Commercial Collection Agency?

Rapid Collections has decades of experience in the collections industry. We use our techniques to make sure that you’re able to get the accounts you’re rightfully owed without having to worry about your reputation. Learn more about our collection processes below.

Explore Our B2B Collections Process

Benefits of Working With a Professional Commercial Collection Agency

Now that we’ve debunked some of the most common myths circling around the collections industry, let’s dive into the benefits businesses get when they work with a commercial collection agency.

Save Time

Debt collection is time-consuming and difficult without the proper means. A commercial debt collection agency can quickly and efficiently recover the money owed to your business, saving you time and resources.

Save Money

Working with a professional debt collection agency can save businesses money by allowing them to focus their resources on core objectives while the collectors handle the time-consuming and costly task of recovering outstanding debts.

Get Access to Professional Experience

A collection agency has years of experience in the industry and understands the best practices to recovering debts, ensuring they’ll have an easier time collecting than your business could on its own.

Get Credibility

Debtors who view a commercial debt collection agency as a third-party source may understand that their debts aren’t just going to go away and they will be pursued unless they pay up. This may motivate them to take future obligations more seriously.

Protect Your Reputation

When you utilize a commercial debt collection agency, you can pursue delinquent debts without being seen as aggressive or unprofessional. In addition, the agency will take responsibility for the management of those accounts and any potential legal action, further preserving your company’s reputation with customers and creditors.

Why Choose Rapid Collections for Your B2B Collection Needs?

So how does Rapid Collections stand out among other B2B debt collection agencies? We pride ourselves on being agile yet dignified—our team provides tailored solutions for each individual case while maintaining a respectful approach towards debtors. Additionally, we offer an additional array of services. Whether you need consultation to develop tailored strategies for better financial management, or are looking to take advantage of our shared AR services, we’re an all-encompassing solution to your financial needs.

How to Ask for Payment on Past-Due Invoices: A Comprehensive Guide

Dealing with past-due invoices can be one of the most challenging tasks for any business. It requires a combination of tact and persistence, as well as an understanding of best practices for asking for payment. In this guide, we’ll provide practical advice on how to ask for payment on past-due invoices and discuss the best strategies for collecting overdue payments.

Why Is It Important to Collect Overdue Invoices?

Collecting overdue invoices is a critical responsibility for any business. It’s important to act quickly, as late payments can cause cash flow problems and put your business at risk of insolvency. In fact, a study by the U.S. Bank found that 82% of businesses fail due to cash flow problems, which are most commonly caused by failing to collect on their invoices.

Worst of all, if your customers don’t pay their bills on time, they may not pay at all. Don’t miss out on income that you’re entitled to receive—follow our five steps to make sure you collect your past-due invoices.

5 Steps to Make Past-Due Invoices a Thing of the Past

Step 1: Establish a Payment Plan

The first step in collecting past-due invoices is to create a repayment plan with your customer. This will allow you to receive some compensation for the goods and services you provided while giving your customers the flexibility to pay off their balance gradually rather than all at once.

If possible, use a payment plan that allows customers to make payments in installments—this will help them stick to the repayment schedule without feeling overwhelmed. It’s important that you make sure both parties agree on the terms so there’s no room for ambiguity down the line.

Learn How to Craft the Right Payment Plan

Learn how to make the perfect payment plan for your business with our payment plan do’s and don’ts.

How to Create a Winning Payment Plan for Your Business

Step 2: Know Your Audience

Asking for payment can be tricky, since it involves communication with customers who may have already been delinquent on their payments. The key is to remain professional and courteous throughout your conversations with customers while still making sure they understand it’s important they make timely payments. This means not just asking them politely but also providing information about why timely payments are important and carefully explaining the consequences if they don’t adhere to their obligations.

Make sure your customers know what will happen if they don’t meet deadlines or miss payments altogether—but keep things as positive as possible without being condescending.

Step 3: Follow Up Regularly & Document Everything

Communication is key in any successful collection effort. Good communication means being proactive in following up with customers about overdue payments. However, it’s essential that businesses keep track of each conversation via email or phone calls so there is no misunderstanding later down the line about what was discussed during those conversations—it can also provide proof in case legal action needs to be taken against a customer who does not meet their debt obligations.

Additionally, businesses should set reminders for themselves about when follow-up contact should occur (every few days or weeks depending on how far behind customers are). These reminders will help ensure nothing falls through the cracks and that collection efforts remain consistent until resolution occurs one way or another.

Step 4: Be Kind But Firm

When collecting money from past-due invoices, being firm but respectful goes a long way towards creating positive outcomes for both parties involved. This means approaching each situation from an understanding perspective instead of issuing threats or ultimatums. After all, most people understand that businesses need contributions from them in order to stay afloat. It helps if businesses can empathize with customers’ situations and make reasonable requests for payment plans (but remember—if too much flexibility is offered, then it could inadvertently lead to more delinquencies down the line!).

Always strive to come across as understanding yet determined during interactions with delinquent customers. This attitude demonstrates accountability while still allowing them some breathing room during difficult financial times!

This attitude extends toward digital communications too. Don’t be overly pushy or aggressive in your past-due invoice emails! This is one of the fastest ways to upset a customer and minimize your chances of receiving payment.

Step 5: Consider Professional Assistance

If your business finds itself unable to recover past-due invoices despite its best efforts, professional assistance may be necessary. Outsourcing collections activities gives companies access to expertise in dealing with difficult debtors. However, many companies struggle to choose the right professional commercial collections agency for their needs.

If you’ve had this problem, look no further than Rapid Collections! Our experienced staff specialize in getting results quickly with best practices developed over many years of experience! With our technology-driven techniques, such as skip tracing, persistent outreach efforts, and debtor education workshops, companies can put their worries aside knowing that professional guidance is available at every step of their collections journey!

An Executive Summary of Past-Due Invoices

Collecting on past-due invoices requires a combination of tact and persistence along with sound strategies tailored for individual circumstances. These strategies should include setting up clear repayment plans with customers/clients upfront, regular following up with all contact documented accordingly, and being understanding yet firm when communicating about overdue amounts owed.

Fortunately, professional commercial collections services like Rapid Collections are available should you need additional guidance at any point throughout the collection journey. Choosing committed partners such as Rapid Collections ensures optimal results, allowing you to focus all your attention back where it belongs—on running a successful business!

5 Signs That Your Collection Policy Isn’t Working

If you’ve struggled with your B2B accounts receivable, you may have decided that enough was enough and put some kind of collection policy in place. However, collections are easier said than done. Many businesses stumble when implementing a new collection procedure or process, and end up with a policy that’s ineffective, turns customers away, and has an overall negative impact. Not sure if yours is doing the trick? Here are 5 signs that your collection policy isn’t working and it’s time to make some changes.

What Is a Collections Policy?

A collections policy is a set of guidelines and procedures that an organization or business follows in order to manage their accounts receivable, which is the money that is owed to them by their customers or clients.

It outlines the steps they will take to collect outstanding debts, including the frequency of billing, the types of communication that will be used to contact customers, and the consequences for not paying on time. It may also include information on how to handle disputes and delinquent accounts.

Why Implement a Collections Policy?

Knowing whether or when a customer will pay is an important part of your business planning. A collections policy is important for maintaining good cash flow and protecting yourself from financial losses. You need one with clear procedures for billing, invoicing, and collection to ensure that the organization is following legal and ethical guidelines for debt collection. Furthermore, it establishes expectations and communication with customers about payment terms, which can reduce the likelihood of disputes and maintain good relationships.

What Are the Legal Consequences of Having a Bad Collections Policy?

Having a bad collections policy can result in a number of legal consequences, including:

  • Violation of Consumer Protection Laws: If a collections policy violates consumer protection laws, such as the Fair Debt Collection Practices Act (FDCPA), it can lead to legal action being taken against the business. Violations of the FDCPA can result in fines, damages, and other penalties.
  • Lawsuits: If a collections policy is unfair or unethical, it can result in lawsuits being filed by the individuals or entities being targeted by the policy. This can result in costly legal fees, damages, and other penalties.
  • Reputation Damage: A bad collections policy can also damage the reputation of the business, leading to loss of customers and revenue. This can have a long-lasting impact on the business’s bottom line.
  • Regulatory Action: In addition to consumer protection laws, there are also other regulatory bodies that oversee collections practices, such as the Consumer Financial Protection Bureau (CFPB) and state attorney general offices. If a collections policy violates regulations, it can result in regulatory action being taken against the business.

Need Help Writing a Collections Letter?

If you haven’t written a collection letter before, it can be tough knowing how to get started. Check out one of our recent blogs for all the info you need to write your next one, and even get access to a sample letter that you can base your own off of!

Learn How to Write a Collection Letter

5 Signs That Your Accounts Receivable Collections Policy Needs a Change

Are you a business owner struggling with a poor collections policy? If so, you’re not alone. Here are a few signs that your current policy isn’t working:

Sign 1: You’re Constantly Chasing Customers Down

You shouldn’t have to constantly call or email customers for payment, especially on a regular basis. Make sure you give them enough time and that there aren’t any other issues (such as customer service problems) impacting your sales.

Sign 2: You Receive Late Payments More Often Than Not

You will struggle to manage your accounts receivable and cash flow if the majority of your payments arrive late. The best way to improve your collections is to identify the problem and develop a solution that keeps your customers happy and your process efficient.

Sign 3: You’re Experiencing High Levels of Bad Debt

A large portion of unpaid invoices might mean your customers aren’t getting value out of their products, or perhaps they’re struggling to pay their bills. To avoid a serious strain on your business, consider what kind of issues they are having and how you can resolve them.

Sign 4: Your Collections Effectiveness Index Is Low

The Collections Effectiveness Index (CEI) is a metric that measures the effectiveness of your accounts receivable collection policy and indicates whether yours works or not. A low CEI can indicate a difference between actual and expected recoveries. 

Sign 5: Past Due Invoices Are Stacking Up

When invoicing customers, it is important to make sure they know you will track their payments and follow through on any delinquencies.

What to Do When Your Collections Processes Aren’t Working_

What to Do When Your Collections Processes Aren’t Working

If you’ve noticed any of these signs, it’s time to take action and make some changes. Here are a few solutions you can use to improve your accounts receivable collection policy:

Take a Closer Look

Take the time to interrogate your processes and look for any weaknesses. Are you following up on past-due invoices in a timely fashion? Are you keeping your customers in the “know” by providing them with an invoice workflow that includes multiple payment options? Is there any room for improvement?

Review Invoicing Procedure

Make sure your invoices are easy to understand and are sent in a timely manner. Confusing wording or unclear descriptions can create confusion on your customers’ part, which could lead to invoices being paid late or not at all.

Here are some tips for improving your invoicing procedures:

  • Use Professional Invoicing Software: Invoicing software can streamline the invoicing process and make it easier to create and send invoices. Many invoicing software options also allow businesses to customize invoices with their branding and include payment options, such as online payment portals.
  • Standardize Invoicing Procedures: Creating standardized procedures for creating and sending invoices can help reduce errors and ensure that invoices are sent out in a timely manner. This can also help improve cash flow by ensuring that invoices are processed quickly and accurately.
  • Use Clear and Concise Language: Invoices should be easy to read and understand. Using clear and concise language can help reduce confusion and prevent errors. This can also help improve customer relationships by making it easier for customers to understand their invoices.
  • Provide Detailed Invoices: Detailed invoices can help customers understand the charges and fees they are being billed for. This can also help reduce disputes and improve customer satisfaction.
  • Set Up a System for Tracking Payments: Having a system in place for tracking payments can help businesses ensure that invoices are paid on time. This can also help identify delinquent accounts and allow businesses to take action to collect outstanding debts.
  • Send Reminders: Sending reminders to customers about upcoming or overdue invoices can help improve payment rates and reduce the amount of time it takes to collect payments.

Overall, improving invoicing processes can help businesses reduce errors, improve cash flow, and maintain positive customer relationships.

Develop Payment Plans

Whether or not you require a deposit, creating a plan that works for both you and your customers can help them better budget for their total bill and pay on time. Enabling them to make payments in smaller installments is a common solution.

Work With a Commercial Collection Agency

A professional collections agency like Rapid Collections can help you recover overdue accounts receivable quickly and efficiently. We specialize in B2B accounts receivable collection services, and our team of experienced professionals has the knowledge and experience to ensure that you get the best results. With Rapid Collections on your side, you can be sure that your accounts receivable are being handled properly, without adding additional stress or headaches to your business operations.

Good vs Bad Debt

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Do you wonder how much debt your business should have? You need to make sure that you’re able to support your core business functions but don’t take on so much debt that it’s impossible to pay back. In this blog, we’ll break down everything you need to know about business debt management.

Debt: A Tool, Not a Crutch

Let’s begin by clearing up some misconceptions, starting with:

“All debt is bad debt.”

While debt can be an intimidating tool to rely on, most small businesses will need to accept some to maximize organizational growth. Proper debt utilization builds your organization’s credit score, creates growth, and helps you pursue revenue-boosting opportunities. The key is knowing which kinds of business debt are worth pursuing.

On the flip side, business owners overly eager to take on debt believe that:

“I can solve my debt issues with more debt.”

This is an extremely dangerous attitude to have and leads to business failure. Debt is a tool, but it should never be used as a crutch. Before taking any on, business owners should always ask themselves:

“Will this debt increase my company’s future value?”

If the answer is yes, it may be worth pursuing that business loan or other form of debt. If the answer is no, you should avoid it.

The Difference Between Good Debt and Bad Debt

You can tell the difference with these three questions:

  • Will this increase my business’s future value?
  • Can this debt interfere with my other operations?
  • Am I taking this debt out of necessity or because it’s a wise choice?

Good debt is an investment in your organization’s future. Bad debt is a flimsy bandage over larger, underlying problems.

Types of Good Debt

Even though the following types of debt are listed as examples of good debt, every debt can be bad depending on the circumstance. Generally speaking, these debts will increase your business’s future value and help your organization grow.

SBA Loans

One of the best borrowing options for small businesses in the U.S., SBA loans are partially guaranteed by the U.S. Small Business Administration, making them low-risk and increasing approval rates. Best of all, they have generous repayment terms, giving borrowers a long time to repay. There are many programs depending on why you need funding, your credit score, and how much you need.

Real Estate Financing

Real estate financing is a crucial option for businesses that need commercial space but don’t have the liquidity to secure it. Real estate loans offer low-interest rates and flexible terms based on the borrower’s situation.

Equipment or Operational Financing

Many small business owners find themselves in situations where they need to expand operations fast but don’t have the capital to secure the necessary equipment. If you’re in this circumstance, equipment or operational financing is a great option.

In these types of loans, the financed asset itself is used as a form of collateral, resulting in a great low-interest, flexible debt. With business models and financing being highly volatile in the wake of the pandemic, the importance of this flexibility couldn’t be overstated.

Interested in Learning More About How the Pandemic Shaped Businesses?

One of our recent blogs breaks down how the pandemic has shaped the professional world and what businesses can do to recover. Check it out to learn more.


How Business Has Changed

Types of Bad Debt

While any debt can be useful in the right context, these financing options usually do more damage than good:

Cash Loans

These are a tempting option for those who need cash but have no liquidity, but most are offered by predatory lenders who’ll charge exorbitant interest rates. These loan sharks target business owners with no other options by enticing them with promises of fast financing and upfront cash. While their offers seem great on the surface, carefully examine their repayment terms before signing an agreement.

Debt to Cover Other Debt

While this isn’t a specific type of loan, this refers to any business debt taken on with the purpose of paying more off. This strategy never works and leads business owners through a vicious cycle of rising interest rates and progressively aggressive lenders.

Things to Know Before Taking on Business Debt

Now that you understand the difference between good debt and bad debt, let’s review some things that every business owner should know before taking on any business debt.

Debt Can’t Account for Poor Business Strategy

Before you ever take on a loan, you should ask yourself why you’re in a situation where you don’t have the capital to pay for an investment yourself. What is it about your current business model that isn’t working? Debt isn’t a solution to your business’s deep-rooted business—don’t treat it as such.

Properly Used Debt Increases Your Net Worth

When used correctly, debt will increase your company’s net revenue and value by allowing you to pursue otherwise inaccessible revenue-generating activities. Ideally, it should pay for itself and then some. The key to successfully leveraging debt? Research! Research every opportunity to see if it’ll be successful. Run financial projections, survey your market, and consult with experts.

Study Your Interest Rates!

A difference of a few percentage points could mean tens of thousands of dollars down the line. Make sure that you understand exactly how the interest rate you’re being offered impacts your business’s finances. Never take a loan with an interest rate you think you’ll struggle to repay. This will damage your credit score and make securing competitive loans in the future more difficult.

Upgrade Your Accounts Receivable

One of the best ways to minimize your reliance on debt is by upgrading your accounts receivable practices. Do you have a lot of outstanding accounts that you’re struggling to collect? If so, turn to Rapid Collections. Whether you need help with single business debt collection or need assistance with hundreds of outstanding accounts, we’re the ultimate solution to outstanding accounts. Contact us today to transform your AR.

Fix Accounts Receivable Errors & Avoid Collection Mistakes

Have you tried handling commercial collections alone? If so, you could be making serious mistakes that lead to accounts receivable errors. Keep reading to learn about the most common collections mistakes and how to reduce your accounts receivable errors.

Commercial Debt Recovery Is Tricky

Commercial debt recovery is a nuanced process. Poorly executed collection practices could damage your business’s reputation, affect client relationships, and minimize the probability that you can successfully collect your debts. Whether you’ve been handling commercial collections alone for years or are unsure how commercial debt collection works, learning the most common mistakes can help you avoid them.

The 5 Most Common Collection Mistakes

1. Harassing the Customer

Too many businesses think that they have to get tough on customers to get their money back. Life isn’t a Scorsese movie—threatening clients that owe you money will only paint your organization as aggressive, rude, and potentially dangerous. Contrary to what many think, collections are about effective, two-way communication. Build bridges with the customer and find solutions together.

We’ve even seen companies spam their clients’ communication channels. While getting in touch is good, bombarding your clients’ inboxes or phones builds resentment and will jeopardize your recovery rates.

2. Being Too Soft on the Customer

On the flip side, real life isn’t Sesame Street, either. Ultimately, your business needs its AR to survive, and you must make that clear to outstanding debtors. While collections are collaborative, you shouldn’t just yield to every customer demand. We’ve seen too many cases where business owners act like debtors’ personal doormats and waste time and energy without ever recovering their debt. Want to fix accounts receivable errors? Remember that you’re working with debtors, not for them.

Don’t Know How to Communicate With Debtors?

Managing tone when collecting outstanding debts is challenging. If you don’t know how to handle it yourself, research commercial debt collection services.


Explore Commercial Debt Collection

3. Not Documenting Everything

While nobody looks forward to it, some collection cases will end up in court. Prepare for a potential court battle and start building your case by documenting everything you do. Make sure that you follow all debt collection laws, and you can be confident going into court.

Outside of preparing for legal proceedings, documentation is great for conducting an internal review. Use this documentation to reflect on your customer policy and look for any common points of failure. Ask questions like:

  • Am I being too aggressive or soft?
  • Is there a specific type of customer that fails to make payments?
  • Are my credit policies too harsh?
  • What are my communication strengths and weaknesses?
  • What can I do to improve?

4. Refusing to Negotiate

As mentioned above, collections are a collaborative process. Many business owners stubbornly cling to their initial demands, expecting a full payment with interest and additional fees. While it would be ideal if every customer could meet payment terms on time and in full, that won’t be the case.

Clients rarely fail to pay their bills from sheer negligence. If they’re failing to pay you, they’re probably struggling with cash flow issues themselves. Try to see the issue from your debtor’s perspective by using an empathetic approach. This perspective will help you find an agreement that works for both of you and fix accounts receivable errors. 80% of an interest-free payment is preferable to a prolonged battle in court where you recover nothing.

5. Hiring the Wrong Collection Agency

One of the most serious mistakes business owners make is hiring the wrong commercial collection agency. The wrong collection agency will make the above mistakes and refuse to help you out in court when it comes down to it. This leads to situations where you hire an agency with questionable collection practices and are left alone to defend them in court.

The right collection agency is a partner from start to finish—regardless of if your case gets settled fast or needs to go to court. The right collection agency will never jeopardize your business’s reputation because they’ll use ethical practices that follow the necessary laws. Looking for the right debt collection agency? Look no further than Rapid Collections. We’ve been helping companies get their AR back on track since 2003 and can do the same for you. DIY collection services are a recipe for disaster—leave it to the pros and contact us today.

What to Do Before You Send Someone to Collections

You need to do your due diligence before sending outstanding accounts to collection agencies. Sending accounts too early paints your organization as aggressive and could upset debtors who may not have even realized that they had outstanding debts.

Not sure what to do before you send accounts to a commercial debt collection agency? We’ve got you covered. In this guide, we’ll talk about what you should do before you partner with a collections agency and the rules for sending someone to collections.

What to Do Before Sending to Collections

Follow these steps before you send out an account to collections.

Verify Bad Debt

The last thing you want to do is start the collections process for non-existent debt. You can avoid this by thoroughly reviewing your accounts receivable records to confirm whether there is outstanding debt to begin with. Double check your records to confirm that payment was actually received and that you didn’t forget to record the transaction. Accusing someone of payment negligence is serious; it reflects poorly on your business and will damage your relationship.

Resend Invoices

After verifying that an account is negligent, resend your invoices. Communications get lost in transit all the time, which is why you should give your client the benefit of the doubt. Approaching your clients in good faith is essential when it comes to any financial matters. The last thing you want to do is make someone feel like a nuisance, especially if they lack the resources to pay you.

Resending invoices is also going to be crucial to supporting you legally, if necessary. Sending out invoices multiple times will show that your organization tried to reach out to the client numerous times before taking more serious action. It will also prove that you were highly concerned with recovering the debt, which strengthens your legal arguments.

Open Communication With the Debtor

Many fail to realize that debt collection is all about two-way communication. Whether you need to call, text, email, or use another channel, start a conversation with your debtor. Never start off by threatening legal action or saying that you’re going to file a lawsuit. This builds an immediate wall between you and the debtor, making successful debt recovery very unlikely.

Start communications off amiably, reminding the debtor about outstanding debts without being condescending. It’s a difficult conversation to have, but one that is absolutely necessary. Keep in mind that healthy AR is vital to the growth and success of a business. Letting debts slide sets a dangerous precedent for your business’s future.

Stay flexible about payment options, too. While you’d obviously like to get paid sooner rather than later, getting paid late is better than never, especially after using the time and resources involved in a lengthy court battle. If the debtor needs allowances in terms of interest or an extended deadline, we’d recommend working with them on it, if possible.

Document all of these interactions. You want to make sure you’re able to present them in court if necessary down the line. Always assume that court is a possibility because keeping legal processes in mind will help you frame your debt collection process and make sure it follows all laws and supports your case.

Work With a Lawyer

If you can’t reach an agreement after opening up communication with the debtor (or can’t get in touch with them), it’s time to partner with professionals. Professionals can help you draft a final demand letter that threatens legal recourse. While you can draft a demand letter independently, a poorly written one can do more harm than good.

Make sure your demand letter follows all debt collection laws and holds up in court by working with a professional to write it. A professional will know exactly what they need to do to create a persuasive demand letter that manages tone and can hold up in court if it ends up being necessary down the line.

Want to Learn How to Write the Perfect Demand Letter?

Here’s our guide to demand letters. In it, we cover what a demand letter looks like, what should be included in it, and how you can write the perfect demand letter!


Become a Demand Letter Expert

When Should You Send Someone to Collections?

Unfortunately, commercial debt collectors are unavoidable in some situations, even when you follow all of the steps above. This forces many companies to turn to commercial collections agencies to solve their debts.

Finding the right time to send overdue accounts to collections is tough. Sending them out too early could make your company seem like money-hungry vultures that hardly give clients a chance to settle debts amicably. On the other hand, sending to collections too late erodes the line of communication with the client, making debt recovery difficult. Generally, we’d recommend sending an account to a collections agency after 90 days of negligence, assuming that you’ve done your due diligence in sending regular reminders.

Make Your AR Troubles a Thing of the Past

Tired of struggling with negligent accounts forcing you to record bad debt expenses? Turn to Rapid Collections! Our global team has been helping businesses solve AR challenges since 2003, and we could do the same for you. We’re successful in resolving 95% of businesses collection cases, and you don’t pay until you get paid. In all things, we’re a full-service partner, and can take your business to the next level. Contact us today to make AR troubles a thing of the past.

How to Write a Collection Letter

 If you’re considering writing a collection letter, you’ve probably been grappling with overdue accounts receivable for a while. If you need help but don’t know where to start, read this guide! In it, we’ll cover what a debt collection demand letter is, what’s included in it, and our tips for writing the perfect one.

If so, we can help! Read this guide to mid-sized and small business recovery and we’ll break down what’s changed, how it impacts you, and what you can do about it with some post-pandemic business ideas.

What Is a Collection Letter, and What Is It Used for?

A collection letter (also known as a demand letter) is a document that outlines a financial dispute between two opposing parties. These letters attempt to collect outstanding debts by beginning a negotiation process with the debtor. While a demand letter is typically written by a professional or attorney, anyone can write one.

Nobody relishes sending out demand letters, but it’s a necessary part of dealing with clients that refuse to pay. AR is the lifeblood of most businesses—if a large number of clients refuse to settle their debts, it’s time to write a collection letter.

While debt collection letters have a negative reputation, they’re designed to avoid more serious action. Legal considerations are the reason why it’s critical that your collection letters are carefully crafted. A poorly written demand letter will lead to unsuccessful negotiations and unrecovered debt. It’s important to keep in mind that not all outstanding debts are the product of sheer negligence. We live in extremely volatile times. It’s entirely possible that your client is simply unable to pay.

An effective demand letter must contain a delicate blend of various appeals. The best approach involves combining all forms of argument but most focusing on logical appeals. Leverage your legal position.

What’s Contained in a Demand Letter?

While every demand letter should be tailored for its specific client, there are some elements that should always be included. These include:

  • An overview of the relationship between the parties involved
  • An analysis of the type of debt
  • Legal justifications that explain the demand letter
  • Coverage of all previous attempts to collect the debt
  • A time-sensitive payment demand
  • The course of action if payment is not received

Most importantly, a demand letter must include a final deadline and the time that debtor has to pay their dues. Demand letters are invaluable tools if your debt does have to go to court, so you want to make sure that it’s executed well. A demand letter must be clear, concise, and easily understandable by the debtor it is sent to.

A poorly drafted demand letter can actually be used against you in court. A client can take legal action against you if your demand letter is threatening or includes malicious content like veiled threats. Write a collection letter to be stern, not threatening.

Our Tips for Writing the Perfect Demand Letter

A well-crafted demand letter is key to getting back your AR and bolstering your legal position if a debt must be taken to court. Follow these tips to write the perfect demand letter:

Include Relevant Documents

A formal demand letter should be a last resort before legal action is taken. If you’re drafting your demand letter, you’ve probably sent out other requests to receive payment, like invoice reminders, and other collection letters. Gather all of these records along with the initial purchase order and attach them to your demand letter. Make sure to make the information as clear as possible by including dates and a full history of payment reminders.

Manage Tone

It’s imperative that you use the right tone throughout the letter. Too many business owners think that the key to the collection process is aggression—this couldn’t be further from the truth. In reality, collections are all about excellent, two-way communication.

It’s understandable that you’re upset, especially if you’ve contacted the debtor numerous times about their payment. However, this anger cannot translate into your debt collection demand letter. Aggression makes the client less likely to pay and could leave you vulnerable in court. Stay objective throughout the letter, and keep your arguments logical and relevant.

Lock Down Your Structure

Make sure your letter is organized and easy to follow. Demand letters aren’t supposed to be complicated or overly long, they should be straightforward and state facts. Keep your letter organized with excellent structure by using headers, lists, bullet points, a table of contents, and other organizational tools.

Clearly Define the Demand Amount and Due Date

The most important piece in writing a collection letter is clearly stating the demand amount and due date to the customer. This information should be extremely easy to locate and refer back to, so consider stating it in numerous places and giving it its own section entirely. Furthermore, break down the payment and make it clear how late fees, interest, and other modifiers have affected it. This piece of the letter should be extremely clear and easy to follow.

Be Punctual

Collections are extremely time sensitive. The longer you wait to get in touch with your clients, the less likely it is that you’ll successfully collect your debt. Furthermore, sending out your letter ASAP reflects your urgency. This will lend credence to your case in court by showing that your business is highly concerned with recovering the debt.

Use Multiple Channels

Finally, make sure that you send your demand letter through multiple channels. Make sure your client has every opportunity to receive your letter by sending it through every channel. Consider sending your letter physically, through email, fax, EDI, and notifying your client through calls and text. You have to be confident beyond a reasonable doubt that your client has received the letter—otherwise, it may not hold up in court.

Need Help Writing a Collection Letter?

Not handling your collection letter correctly can do more harm than good. If you want to ensure that your collection letter is handled right, you should consider partnering with a professional.


Learn More About Professional Collection Services

Our Accounts Receivable Demand Letter Example

Here’s our collection letter example:

George’s Dinosaur Store
429 Stegosaurus Way
St. Louis, MO, 63123
(314) 899-7820
[email protected]

January 5, 2022

AMOUNT DUE: $50,000

THIS IS OUR FINAL ATTEMPT TO COLLECT YOUR DEBT.

Dear Archibald Gunthrey,

You currently have an outstanding balance with George’s Dinosaur Store in the amount of $50,000.

This outstanding balance is in regards to the dinosaur bones purchased on 6/2/2022 and has reached over 120 days in aging. We’ve attempted to reach you multiple times across numerous channels of communication to no response. Our initial agreement (attached below) has not been complied with. If the full payment amount of $50,000 is not received in full within 10 days of receipt of this letter, we will pursue the legal recourse we deem necessary to recover the debt.

To resolve this matter, select one of the payment options below:

  • Payment Option A (Include Specific Date)
  • Payment Option B (Include Specific Date)
  • Payment Option C (Include Specific Date)

If you fail to respond to this letter, all legal options shall be explored, including the legal proceedings we deem necessary to recover your debt. Alternatively, this debt may be transferred to a collection agency in accordance with State and Federal Laws.

This demand letter for payment serves as official notice and may be used in court as evidence of your failure to pay. If legal action is necessary, it may involve you hiring an attorney and will impact your credit history. Attached is evidence of all of our previous attempts to contact you.

This is our final demand letter, and we hope we can resolve this matter together as soon as possible.

Regards,

George’s Dinosaur Store

When Do You Send a Debt Collection Demand Letter?

Determining the right time to send a collection letter is challenging. If sent too late, you minimize the chance you’ll successfully collect the debt. When sent too early, it could be misconstrued as aggressive, impact your reputation, and ruin your chances of success.

A demand letter should never be sent as first notice. Only send a demand letter when you’ve run out of options to resolve your outstanding debt. We would generally recommend waiting until 90 days after your invoice’s due date to send a final demand letter.

What Happens if They Don’t Respond?

Wondering what to do if you send a final demand letter and the client still doesn’t get back to you? While legal recourse is always open to you, your best bet may be partnering with a collection agency. A collections agency will have the skill set to make sure that your outstanding debts are recovered.

For the ultimate collection team, look to Rapid Collections. 95% of cases that come to us are successfully resolved without ever having to go to court. We’re not just successful though, we’ll keep your business’s reputation in mind the whole time. Poor AR doesn’t have to be the norm. Contact us and it won’t be.

Mid-Sized and Small Business Recovery: How Business Has Changed Since the Pandemic

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We face an entirely different world from the one we exited just a few years ago. From businesses being forced to embrace virtualization and experimental work models to what’s being described by many as the next recession, things have changed, and they changed fast. Just as business owners start picking up the pieces, something else comes along that forces them to start from scratch. Few businesses thrive during a recession—has your business struggled to keep up?

If so, we can help! Read this guide to mid-sized and small business recovery and we’ll break down what’s changed, how it impacts you, and what you can do about it with some post-pandemic business ideas.

Work Models

What’s Changed

We don’t work like we used to, and we probably won’t be going back any time soon. Hybrid work models are here to stay—in fact, 74% of U.S. companies plan on permanently implementing hybrid-work models. Some companies have taken it a step further and even incorporated fully-remote models. Employers are more eager to post and hire for fully-remote positions across the board today.

These changes have led to a decentralization of the American workforce. Employees are now divided across cities, states, or even countries.

How It Impacts Mid-Sized and Small Business Recovery

These work model changes have forced small to mid-sized businesses (SMBs) to compete with corporations on multiple fronts.

Now that corporations are hiring across the country, small to mid-sized businesses have to compete for talent with companies across the country. This is especially challenging because larger employers may be able to offer benefits, incentives, or other advantages that a smaller business simply isn’t capable of matching.

SMBs also lack the technology to implement these policies. Larger businesses have access to a greater pool of financial and technological resources to execute nationwide employment practice.

These changes to work models have made it difficult to keep up. Many SMB owners have started to lag in making their payments to debtors. On the other side, more uncollectible accounts expenses are being recorded than ever before.

What You Can Do:

Innovate or die.

Employees expect hybrid work options and will refuse to work for a business that doesn’t offer them. If you’ve struggled to implement a hybrid work model, follow these tips:

Manage Expectations

Excellent communication is key to making sure that your hybrid model is well-executed.

Stay transparent about the transition to hybrid with your employees and make procedures clear. Specify what tasks can be done virtually and what processes will require an in-office presence. Finally, make sure that your managerial team is enforcing and following these rules. Management sets the tone for the rest of your employees, so make sure that they embody the right values.

Invest in the Necessary Technology

It’s imperative that you invest in technology sooner rather than later. The longer you wait to innovate, the further your company falls behind. Make sure to properly train your employees on utilizing this new tech, otherwise you could be dealing with a lengthy adjustment period.

Ensure Unity and Connection

In hybrid work models, employees are commonly “siloed,” overly focused on a singular process and detached from the greater whole of the business. Siloing makes your business less flexible and could cause process inefficiencies or communication breakdowns.

Avoid this by establishing thorough lines of communication with remote employees. A regular line of communication will aid your mid-sized or small business recovery by ensuring that hybrid employees are comfortable getting in touch with everyone else.

Multiethnic business people in meeting

The Economy

What’s Changed

93% of U.S. businesses are worried about a recession over the next twelve months. Inflation has already started to impact demand, with 38% of small businesses reporting that they’re already facing an inflation-related decline in customer demand. We’re set for some harsh economic times in the near future, and we’ve already begun to feel its effects.

How It Impacts Mid-Sized and Small Business Recovery

There are fewer customers coming in, and the customers that are buying struggle to make payments. These AR difficulties have caused businesses to deal with more bad debt, uncollectible expenses, and has lowered their overall working capital. Working capital taking a hit can be devastating if you’re heavily reliant on healthy cash flows. Mid-sized and small business recovery is especially difficult in industries like:

  • Retail
  • Manufacturing
  • Automotive
  • Telecommunications
  • Transportation

What You Can Do:

Have you felt the recession in your AR? If so, follow some of these tips for improving your accounts receivable!

1) Transition to a paperless system

One of the best ways to make sure that your ledger stays organized is by transitioning into a paperless system. Going paperless cuts out logistical challenges, makes sure your invoices aren’t lost, and speeds up the AR process overall.

2) Incentivize Early Payments

Encouraging customers to pay early is one of the best methods to avoid outstanding AR. Set up a system where customers get a discount or benefit if they pay early. Late payments aren’t always malicious—sometimes, clients just forget. Offer an incentive and that won’t happen.

3) Automate Invoicing

Automation in accounting is great whenever possible. AR automation tools come with a huge range of benefits, including:

  • Creation of recurring invoice schedules
  • Automatic customer reminders
  • Internal company reminders

Interested in Learning More About Improving Your AR?

Read our blog to learn more about how to improve your AR


A Collection Agency Can Help

Need Help With Mid-Sized or Small Business Recovery? Rapid Collections Can Help!

If your accounting has struggled to adjust to the post-pandemic world, turn to Rapid Collections! Whether you need AR small business recovery or corporate recovery, we provide effective, ethical collections solutions. Contact us today to take your AR where it needs to be.

Debt Collecting Agency Myths Busted

There are a lot of rumors that circulate around debt collection. Between unethical collection processes and media representing debt collectors as shady types that enjoy busting kneecaps, we’re not surprised that people have the wrong impression of debt collectors. We get so many questions about what commercial debt collection looks like that we decided to put together a list of the most common debt collecting agency myths—and bust them.

Myth 1: Debt Collectors Harass Debtors

Everyone’s familiar with the concept of the tough, threatening debt collector willing to resort to unethical or even illegal tactics to collect. While there are debt collectors who use underhanded tactics like 24/7 calling and contacting debtors’ coworkers and family, these strategies are ineffective and illegal. Some collectors will continue contacting a debtor after they send a cease and desist letter, which puts their clients and company at legal risk. The right debt collecting agency will never legally jeopardize your company.

Effective debt collectors have no need for shady intimidation tactics because debt collection is a collaborative effort. No amount of intimidation can help collect on debt owed if the debtor simply doesn’t have the money available. Excellent communication skills are key to helping collectors understand debtors and how they can motivate them. The right collectors will work with debtors through open lines of communication.

Myth 2: Debt Collectors Show Up At Doors

Many Americans see the same picture in their heads when they hear the term “debt collector.” They imagine a shadowy figure knocking on a family’s home, interrupting dinner time with threats of legal action, eviction, or worse.

While debt collectors did once knock on doors in the 1920’s, that practice is rare today. Not only is it impractical from a time-management perspective, but there are hundreds of different ways to make contact in 2022. While knocking on doors is technically still an option, cell phones, emails, and social media give collectors a lot of other ways to make contact.

The only time you can expect a debt collector to go knocking on doors is if they have a serious flair for the dramatic, in which case they probably aren’t effective collection agents.

Myth 3: Debt Collectors Force People Into Bankruptcy

Many believe that debt collectors enjoy pushing debtors to bankruptcy. The reality of the situation is that most debt collecting agencies are going to strongly advise their agents against driving debtors to bankruptcy. A debtor filing for bankruptcy is a worst-case scenario for a debt collection agency because it terminates any financial obligations they had to their creditors. This leads to the credit grantor and debt collector receiving very little to nothing at all in repayment.

The right debt collector will understand that people are in precarious financial situations if they’re failing to make payments and will avoid driving them to bankruptcy. This is why effective debt collecting agencies often train their employees on how to counsel debtors and work with them on flexible payment arrangements.

Myth 4: Debt Collectors Take From the Downtrodden During Economic Hardship

People assume that debt collectors love economic downturns because it translates to more unpaid debt. While there is more uncollectible consumer debt during economic downturns, those accounts are usually much harder to collect. As mentioned earlier, collecting from debtors who file for bankruptcy is impossible. Finally, a prolonged recession leads to less AR as a whole, which obviously means less to collect.

Debt collectors do not prey on the downtrodden either. Debtors come from every walk of life—a lot of people find them in circumstances where they’re suddenly unable to make payments. The types of people collectors most often deal with are those who’ve had lifestyle changes due to unforeseen circumstances, didn’t know what they were getting into with credit, or people who are trying to avoid payment.

Whatever the case may be, the right debt collector will work with these people to make sure that they’re able to make their payments on time.

past due bills pile

Bust Myths and Expectations With Rapid Collections

Rapid Collections is here to help! We’ve been offering reputation conscious collection services since we were founded in 2003. If you need effective collection services that don’t compromise on ethics, turn to Rapid Collections as your next debt collection partner and build up your cash flow and also gain extensive knowledge on prevention and collection best practices.

The Relationship Between Debt Collection and Reputation

93% of users say that online reviews have had an impact on their buying decisions. Between Google, Yelp, Facebook, and more, there’s no shortage of platforms that your customers can use to make their voices heard. With that in mind, businesses have to be extra careful about maintaining a positive reputation. Choosing the wrong debt management and collections system can be a huge mistake, and when implemented poorly, it’s a recipe for a PR disaster. Keep reading to learn about the importance of your business’s reputation and how the collections process affects it.

How a Positive Reputation Impacts Your Business

Modern consumers have a full toolbox. Between a myriad of social platforms and dedicated reviewing sites, they have everything they need to form an opinion on your business before they ever make contact with you. A positive reputation is key to making sure that potential customers get the right first impression of your business. A positive reputation can help your business:

Attract New Customers

98% of Americans read online reviews. A positive reputation translates to positive online reviews, which are the first thing most people consult when they’re considering a company. Glowing reviews will encourage customers to research your business further to see if it’s the right fit for them.

Build Trust

Your company’s online presence is the first point of contact with your business. Have you ever been interested in a company only to look them up and see nothing but scathing reviews? Odds are that you decided that company wasn’t worth looking into. A positive reputation builds a foundation of trust between you and your customers.

Intrigue Talented Employees

Talented employees will seek out employment opportunities with high-quality businesses. You can’t expect skilled employees to be excited about joining your business if you have a bad reputation.

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How a Negative Reputation Impacts Your Business

While a positive reputation is great to have, it’s become expected. Good reviews are the first bar your business has to clear for customer acquisition. Comparatively, negative reviews are devastating. Negative reviews lead to harsh consequences for your business, some of which include:

Loss of Customers

Reputational damage spreads like wildfire. It only takes a few negative reviews or comments for word to spread that your business has taken a dive in quality. You’ll be surprised how quickly long-term customers will stop visiting your business if they hear there’s been a drop in quality.

Fewer customers leads to lower sales. Lower sales make it harder to run your business and could force you to downsize or close your business entirely.

Raise Your Default Risk

There’s an inherent default risk with extending lines of credit. Your customer’s loan payments affect the kind of credit policy you recieve. This means that delayed or unreceived payments from customers affect your credit policy. Bad debt puts the entire financial stability of your organization at risk.

Lower Employee Retention

A poor reputation will lower your employees’ motivation. Every worker wants to be proud of the company they work for, not ashamed.

The Connection Between Debt Collection and Reputation

There’s a huge link between debt collection and reputation. The wrong collection agency will use techniques that get your company in trouble. Some of these techniques include:

Refusing to Identify

Some collection agencies will use any method to get people to pay off debt in collections. Many collection agents will fail to identify or misrepresent their identities. This is done with the intention of misleading debtors into giving up sensitive information like their bank account details or social security number.

Debt collection and reputation should never clash. The right collection agency will be transparent to the debtors about who they are and what purpose they serve, preserving your company’s reputation.

Constant Contact

Unethical collection agencies will call a debtor’s home and workplace at all hours of the day. Many collectors will even go so far as to call their co-workers and family members to threaten or embarrass the debtor. Not only is this an unethical, shameful tactic, but it’s a security risk that sacrifices debtors’ sensitive information.

The right collection agency will accept any “cease communication” letters that they receive. This letter demands that collectors can only be able to communicate with the customer to inform them about legal action. Harassment doesn’t lead to results—it only endangers your company’s reputation and leads to legal battle.

Threats

Unethical collection agencies will threaten to sue or arrest debtors, which they don’t have the authority to do. Some collection agents have been known to impersonate law officers or attorneys before making these claims, which isn’t just unethical, but illegal. Debtors have even reported agents that have threatened to garnish wages, seize properties, or pursue litigation.

The right collection agency will be transparent about the scope of what they can and can’t do to the debtor and their client. Furthermore, the right agency will be clear about the connection between debt collection and reputation, assuring you’re aware of why avoiding “dirty tactics” is important.

The Right Debt Collection Agency

If you’re looking for the right blend of debt collection and reputation, you’ve found it. Rapid Collections has been doing debt collection right since 2003. Our seasoned team combines effectiveness with ethics—we get the job done and do it right so reputational blowback is a non-issue. For an above-board debt collector with a record of success, turn to Rapid Collections.

How To Increase Data Security in Debt Collection

Collecting unpaid bills for clients requires sensitive information. Home and business addresses, phone numbers, credit card numbers, and even social security information are shared so debt collectors can efficiently do their job. Access to personal data makes data security critical. Learn more about tips for preventing data breaches and other cyberattacks from exposing sensitive data.

Common Data Security Strategies

A data breach can be a disaster for many debt collection agencies. Unauthorized access to personal data impacts relationships with clients and puts their customers’ personal information at risk. Knowing the common causes of data breaches is helpful for enhancing data security.

Unknown Security Vulnerabilities

One of the biggest issues for many agencies is they don’t know where vulnerabilities are in their IT security. An outdated security system’s weaknesses expose valuable information and provide an easy access point for cyberattackers.

Human Error

Did you know that human error is the leading cause of data breaches? From using weak passwords to falling for phishing scams, employees can unknowingly send sensitive information to the wrong people.

Criminal Hacking

Data collection agencies are common targets for cyberattacks because they manage important personal information. Failing to set up the proper security measures increases your risk of experiencing a data leak from phishing, SQL injections, and malware attacks.

Social Engineering

Cybercriminals are increasingly relying on social engineering attacks to gain access to client information. These attacks trick employees into providing critical data by mimicking emails, text messages, social network direct messages, and phone calls.

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Tips To Enhance Data Security for Debt Collection Compliance

Managing sensitive information is challenging, but protecting that data is critical for a collection agency’s success. While debt collection compliance standards don’t detail specific data security measures, having the right strategy protects your company from the consumer complaints that organizations like the Consumer Financial Protection Bureau investigate. Here are some tips for preventing attempts to collect private information:

Create Strong Passwords

Strong passwords are one of the most effective techniques for preventing data breaches. Make sure every employee has a unique password that features multiple special characters. Also, teach them that having the same password for multiple accounts poses a security risk. Implementing a system that requires different passwords for separate accounts enhances security even if a breach occurs.

Encrypt Data

Data privacy guidelines place the responsibility of protecting customer information on the company. Data encryption is critical because it adds another layer of protection to the sensitive information stored by a collection agency. Encrypting sensitive information is critical for providing peace of mind to your clients.

Regularly Update Security Software

Many software security providers issue regular updates that offer additional security layers. Failure to update your internal systems means your network isn’t up to date and could expose your sensitive data to cyberattacks.

Limit Internal Access

Carefully granting employee access to critical data protects your agency and clients. Too many employees with access control increases the likelihood of a data breach because hackers have more entry points. Determining which employees need the necessary credentials will reduce the risk of unauthorized attacks.

Train Employees

Because human error is the leading cause of data breaches, properly training your employees is critical. Make sure all workers understand the importance of security and teach them techniques for spotting phishing attempts.

A Debt Collection Agency That Prioritizes Data Security

Looking for a debt collection agency that protects sensitive information? Contact Rapid Collections today to learn more about our data security measures.


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Rapid Collections: A Leading Collection Agency in St. Louis, MO

The Rapid Collections team understands the importance of data security in protecting our clients’ image. We leverage our wealth of knowledge and experience to make sure their sensitive information is safe and have an established and top ranked security company monitoring all activity 24/7 as another layer of protection for their clients. Security and protection are top priority for all data. You are safe with Rapid Collections.

Our collection experts exceed expectations and build long-term relationships with our partners by offering the following advantages:

Professional Process

Rapid Collections offers a professional collection process that maintains a strong relationship between client and debtor. Our collection specialist team carries out our system in house and contacts all parties by phone and in writing. All of our services are designed to follow federal and state laws.

Client-Centered Solutions

Finding an amicable solution between credit and debtor is important for the Rapid Collections team. We work hard to settle disputes by analyzing all contractual documents to satisfy all parties.

Expert Agents

Our expert agents thoroughly review all files before contacting the debtor. Our team understands that final decisions belong to the client and adhere to their wishes throughout the process.

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Rapid Collections: Providing Expert Debt Collection for Missouri and Beyond

Rapid Collections has been providing comprehensive global cash solutions for clients since 2003. Our collection professionals are committed to assisting our clients with their debt recovery needs while developing positive relationships with their debtors. Unlike other companies, Rapid Collections manages the entire collection process. Along with our collection agency solutions, we also provide the following services to streamline the debt recovery process:

Legal Representation

We work hard to settle cases before they escalate, but sometimes legal representation is necessary. Our team of attorneys and paralegals work across various industries and have the knowledge and expertise to prepare the best case for your company.

Accounts Receivable Outsourcing

Rapid Collections offers accounts receivable outsourcing services that improve cash flow and reduce stress on your internal team. We target the following areas to improve your AR management:

  • Billing processes
  • Cash flow forecasting
  • Client investigation protecting
  • And more

Consulting

Our team offers consulting and training services that give our clients the debt collection resources they need. Whether you need one-on-one or group training sessions, we make sure your internal departments are prepared to deal with unresponsive accounts.

Contact Rapid Collections today to learn more about our debt recovery services.

Guide To Business Debt Collection Laws

It’s critical to manage cash flow and revenue for a business. Making sure your company has enough equity to pay bills and cover salaries is what maintains daily operations. However, a client’s unpaid invoices can sometimes begin piling up and impacting your bottom line. Retaining the services of a commercial collection agency is one of the strategies that business owners use to collect debt. This process is efficient as long as you follow the right legal procedures. To help, here’s a guide to business debt collection laws.

Why Are Business Debt Collection Laws Necessary?

Business debt collection laws give businesses and debt collection agencies guidelines that dictate safe practices. They also protect debtors against unfair processes that impact their reputation and long-term financial capabilities.

Commercial Debt Collection Laws

While commercial debtors don’t have the same level of protection that consumer debtors enjoy, there are some business debt collection laws that must be followed, including:

Fair Debt Collection Practices Act (FDCPA)

The FDCPA is the primary federal law that oversees debt collection processes. It prohibits commercial debt collectors from using abusive or unfair practices. Some of the restrictions placed on debt collection agencies include:

Time and Place

Debt collection service providers can’t contact you at a time or place that’s inconvenient to the debtor. Contact before 8 a.m. or after 9 p.m. is prohibited, and the collection agency can’t reach out to you at work.

Harassment

Debt collectors are forbidden from harassing the debtor or anyone associated with them. Any contact, whether over the phone or in person, must maintain a professional tone.

Attorney

If the debtor retains an attorney, all contact from the collection agency must go through them. However, this is only true if the agency knows the attorney and is provided with their contact information.

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Commercial Collection Agency Association (CCAA)

State and federal governments don’t govern business debt collection agencies. Instead, they established the CCAA, a non-government body that exists under the Commercial Law League of America. Founded in 1974, this agency supervises and improves best practices in the commercial debt collection industry. To become a certified member of the CCAA, an agency must:

  • Have been in operation for at least four years
  • Have a separate trust account where funds are deposited
  • Have up to 80% of their entire operations because commercial debt related
  • Retain at least one agent that is a member of the Commercial Law League of America
  • Offer a $300,000 bond to protect the creditors it serves
  • Be open to random visits from the CCAA’s executive directors

The CCAA also has a strict code of ethics that each member must adhere to that includes:

General Conduct

Every member of the CCAA is required to follow their general conduct rules, such as:

  • Maintaining a high standard of fairness and honesty
  • Providing an efficient collection service that protects the interest of creditors
  • Operating under a name that doesn’t suggest the agency is a branch of or associated with any government entity
  • Making sure all employees are familiar with and fully comply with the Code of Ethics
    Avoiding any unauthorized processes or practices of the law

Interactions With Creditors

The CCAA also offers guidelines to follow when working with creditors. These include:

  • Comply with creditors’ instructions and promptly process claims.
  • Identify all charges to the creditor.
  • Identify service and administrative charges and keep them separate from court costs and suit fees.
  • Display an official logo on letterhead for all correspondence sent to creditors.
  • Provide professional and courteous marketing of services and don’t engage in an activity that impacts the industry’s reputation.

Relations With Debtors

Managing relationships with debtors is a key element of the debt collection industry. Here are the guidelines provided by the CCAA in these dealings.

  • Avoid deceptive practices or statements that may lead debtors to believe they’re dealing with someone outside the debt collection industry.
  • Show consideration for the debtor’s problems and treat them with respect.
  • Provide the debtor with any documentation that validates the debt.
  • Never engage in any harassing conduct.
  • If the debtor retains an attorney, the agency must deal directly with their representation unless the attorney doesn’t respond to contact within a reasonable time—then you can contact the debtor.
  • Never threaten to damage a debtor’s credit reputation if they don’t pay or cooperate by alerting other vendors and financial institutions.

Are You Looking for a Commercial Debt Collecting Agency That Follows Business Debt Collection Laws?

The Rapid Collection team knows that adhering to commercial debt collection laws benefits all parties. Contact us today to learn more about our business-to-business approach to commercial collections.


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Rapid Collections: An Expert Commercial Debt Collection Agency

The Rapid Collections team understands complying with business debt collection laws is critical for maintaining our reputation as a leading commercial debt collection agency. Our commitment to monitoring and enhancing our processes enables us to take the necessary steps to improve our organization and services. Along with our leading collection agency services, we also offer other solutions to serve our clients, including:

Legal Representation

Our goal is to settle cases quickly for our clients, but sometimes legal representation is necessary. We’ve carefully selected our legal team to make sure they offer comprehensive knowledge and expertise in multiple industries. Our attorneys provide enhanced attention to detail that ensures your case best suits your company.

Consulting

We understand that the debt collection process is difficult for many clients. That’s why we offer consulting and training services to equip you with the right tools. Our team works with clients to develop a custom approach that best suits their needs.

Contact Rapid Collections today to learn more about how our process respects business debt collection laws.

When Should You Partner With a Debt Collection Lawyer?

Does your business struggle with recovering outstanding debts? A debt collection lawyer may be the right choice for you. A collections lawyer can help you through the collection process so your business gets what it’s owed.

Avoid Sunk Costs

A major concern for any business owner is completing excellent work for clients and never getting paid back. Outstanding debt kills revenue flows and makes the resources you invested into your non-paying client a sunk cost. If your business regularly struggles with clients who don’t pay, consider hiring a debt collection lawyer.

Partnering with a debt collection lawyer is the most effective legal recourse to recovering your money. Continue reading to find out more about what debt collection lawyers do, signs you may need one, and how to choose a collections lawyer.

What Does a Debt Collection Lawyer Do?

A debt collection attorney legally represents your business and takes action to help you recover debt. Debt lawyers can handle all parts of the collections process, from filing paperwork to legal representation in court. Some debt collection lawyers protect debtors rather than creditors— these are the lawyers you might face in court.

Signs You Need a Debt Collection Lawyer

How do you know when your business needs to partner with a debt collection lawyer? A collections lawyer is the right choice if your business is dealing with the following:

You’re Owed a Lot of Money

If your business is owed a substantial amount of money, then it might be worth consulting a debt collection attorney. Large sums of money left unpaid can affect your company’s bottom line, so hiring an attorney is a good idea.

You Need To Send Demand Letters

If you want to avoid the stress of court, demand letters are a great way of encouraging your clients to pay their debts. It’s critical to make sure that your demand letters are legally sound—a collections lawyer can handle the process of writing and sending them for you.

Demand letters also establish legal precedence. Presenting legally sound letters in court can prove that your business has asked for debt repayment through the proper channels.

Your Client Is a Large Company

Larger clients owe more money and have greater legal resources. If you feel unequipped to combat the legal team of a large client, consider hiring a debt collection lawyer. A good debt collection lawyer has experience dealing with bigger companies and knows how to effectively approach the situation.

You Need Legal Advice

If you have any questions about debt collection lawsuits or the collections process, partnering with a debt collection lawyer is a good idea. From filing lawsuits to avoiding lengthy debt collections in the future, a collections lawyer can answer questions on a range of topics.

You’re Going to Court

Nobody wants their collections case to go to court. Unfortunately, court becomes necessary in cases where you’re simply unable to collect a debt otherwise. Come to court prepared by hiring a collections lawyer. While you can represent yourself, your debtor could hire a debt lawyer of their own. Do you feel comfortable going up against a professional debt lawyer alone in court? A lawyer for debt collection lawsuits can help you get a court ruling that works for your business.

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Questions To Ask When Choosing a Debt Collection Lawyer

How do you choose the right debt collection partner? Here are some key question to ask before deciding on a collections lawyer:

Will They Represent You in Court?

Some debt collection attorneys will not represent you in court and only offer their services consultatively. Since court is an unfortunate reality of many debt settlement cases, make sure that the debt lawyers you partner with will help you out in court if necessary.

What Types of Debt Do They Specialize In?

Debt collection lawyers vary widely in the debts they specialize in. Where some attorneys are excellent with large clients, they might struggle recovering debts from smaller clients. Ask any debt lawyers you’re considering to share cases they’ve worked on. Are they similar to your business’s case?

What Does Their Communication Look Like?

While lawyers often have hectic schedules, a good legal partner should always have time for you. Ask lawyers you’re considering to describe their communication process. Will you receive updates regularly? How often will you be able to reach out to them? Communication is key to any partnership, so make sure that your debt lawyer prioritizes it.

Do They Have References?

A reliable debt collection attorney should be excited to share their references with you. When reviewing a lawyer’s references, look for businesses that dealt with cases similar to yours. If a collections lawyer is hesitant to share references or doesn’t have any available, they might not be a trustworthy partner.

How Much Do They Charge?

Debt collection is ultimately about recovering money for your business. If a collections lawyer charges significant fees and takes a huge share of the recovered debt, they might not be the best choice. Look at the fee structure of each attorney and consider whether your business can afford them.

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Rapid Collections Can Recover What You’re Owed

A debt collection lawyer is a valuable partner for any business struggling to collect their debts. Collection lawyers can help throughout the entire process, from demand letters to court hearings. If your business is owed large amounts of money, start researching debt collection lawyers for assistance.

If you’re looking for an effective partner with a track record of success, turn to Rapid Collections. We’ve been helping and protecting our clients coming up on 20 years of business. We recover 95% of debts before they have to go to court. We handle the entire debt collections process and are committed to your business’s success. Contact us today.

Signs You Need To Partner With a Commercial Debt Collection Agency

Are you a business owner with multiple outstanding debts? If so, your business could be at risk. Luckily, there’s a solution. Keep reading to learn why you should partner with a commercial debt collection agency and find out how ignoring outstanding debt negatively affects your business.

Common Signs You Should Hire a Collection Agency

Delinquent accounts can tarnish your reputation and your business’s success. But not every business owner knows when it’s time to reach out to a debt collector. If you’ve never had to deal with delinquent accounts or accounts receivable issues before, you might be unaware of some important red flags. These are the common signs that you should hire a commercial debt collection agency:

Bill Collections Take Up More of Your Time

If you’re a business owner who spends more time collecting bills than focusing on daily operations, it’s time to hire a collection agency. In order for your business to succeed, you need to:

  • Be present
  • Focus on daily tasks and future success
  • Build relationships with employees and customers
  • Maintain a consistent cash flow

You can’t do any of these things if bill collection keeps getting in the way of your day-to-day routine. Commercial debt collection agencies help you streamline your collection process, so you can continue focusing on your responsibilities as a business owner.

Your Administrators Are Overwhelmed With AR

Many business owners rely on administrative staff to collect outstanding balances and manage delinquent accounts—but that’s not what they’re there for. If your administrators:

  • Vocalize their need for AR support
  • Seem more stressed out than usual
  • Can’t sustain your delinquent account management

Then you need a commercial collection agency. Putting the weight of AR responsibilities on your admin staff is not only risky because they’re underqualified, but can also make your team stressed. They should be focusing on daily tasks, not taking on the job of a collection agency.

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Decrease in Cash Flow

If you have too many clients with past due accounts or worry those accounts will become a write-off, it’s time to hire a collection agency. With multiple outstanding accounts and no knowledge of how to collect debt properly, your company is losing money. A debt collector has the techniques, tools, and tactics to successfully collect your debt or reach a different solution that works for you.

Don’t let your money get away from you. Partner with an industry-leading commercial debt collection agency today.


Reach an Expert

You’ve Given Up Collecting Outstanding Debts

If you’ve been overwhelmed with delinquent accounts for too long, you might just give up instead of hiring a debt collector. But doing so can significantly damage your organization. Maybe you haven’t hired a debt collector because you feel there’s no way they can do it if you can’t. 

Debt collectors are trained professionals and have the necessary tools to collect your debt successfully or reach your desired solution, whether that be:

  • Partial collection
  • A settlement
  • Filing a lawsuit

Which Commercial Debt Collection Agency Is Right For Me?

You deserve a commercial debt collection agency that:

  • Maintains positive relationships with your clients
  • Avoids threatening techniques like harassment
  • Represents your organization well
  • Leaves the door open for both parties to work together again in the future

Rapid Collections, located in St. Louis, Missouri, does all of that and more. With over 20 years of industry experience, we specialize in commercial and small business collections, managing accounts from midsize to Fortune 500 companies and maintaining a 95% success rate. Our effective debt collection services include:

How To Choose a Collection Agency

Are you tired of working with non-communicative collection agencies that don’t prioritize your case? If so, keep reading to learn about choosing a collection agency that suits your needs and how that can benefit your business.

How Do I Find a Good Collection Agency?

If you have outstanding accounts, you’ve probably asked yourself this question. It can seem difficult to answer when you don’t know what to look for. What should you look for when hiring a collection agency? Let’s break it down.

Collecting debt can be incredibly stressful, time-consuming, and can take away from your daily operations. Collection agencies exist to take the burden of contacting your delinquent accounts off your shoulders, so you can continue focusing on the success of your business.

A good debt collection partner should do the following:

  • Maintain positive relationships with your customers
  • Avoid threatening tactics
  • Represent your brand or business well
  • Leave the door open for both parties to work together again in the future

Choosing a Collection Agency That Suits Your Needs

When choosing your collection agency, keep the following criteria in mind to make sure the company is successful at what they do and suits your needs:

High Return on Investment

ROI is essential when choosing a debt collection partner. If an agency charges an initial low percentage, that doesn’t mean they’re making you more money. They may only take on small, easily collectible debts, or they don’t collect debts in full.

When choosing your collection agency, request access to an industry analysis so you can compare results and ROI of different collection agencies.

Supportive Services

If your collection partner’s only service is debt collection, they’re likely not well-versed in their industry. While debt collection is the primary service of a collection agency, many collectors offer supportive services that go beyond the initial collection.

These services include:

  • Accounts receivable support: By offering AR support, your collection partner gives you the tools you need to avoid delinquent accounts. Many other agencies have one goal: collecting money. They don’t offer solutions that help you avoid needing debt collection because they want you to need their services. Offering AR service support shows that your collection partner cares about what happens to your business after your transaction is complete.
  • Legal support: While legal support services aren’t necessary for all debt collection cases, it’s important to have them available to you, just in case. Some collection agencies hire legal teams to support you if your case ends in court. If an agency doesn’t provide this type of support, they aren’t prepared for every possibility.

Dependable, High-Quality Customer Service

Your debt collector should provide consistent and dedicated customer service. Many collectors pass your case around like a call center would and you never have a dedicated point of contact. This makes results unlikely because no one is committed to your success. Instead, multiple collectors attempt to collect your debt and fail, so they pass it on to the next person.

Another important aspect of customer service is accessibility. Are you having trouble reaching your collector? Does your collector send you to voicemail when you ask for updates? If so, it’s time to go somewhere else. Look for a collection agency that offers 24/7 connectivity with your case’s agent, so you always have access to case updates.

You deserve a collector that values your success and focuses on your experience. Always read agency reviews before closing a deal. That leads us to our next requirement—a positive reputation.

Well-Respected/Positive Reputation

Reviews and previous customers’ experiences indicate a collection agency’s capabilities, customer service, and success rate. If a collection company is recommended to you multiple times and you’ve read positive reviews, they’re likely a good partner for you.

Looking for a debt collection partner with a positive reputation and excellent customer service?

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Produces Results

Success rates are crucial when choosing a collection agency to work with because they mirror a partner’s results. If their clients aren’t receiving their desired results, whether that be a settlement, partial debt collection, a payment plan, or full payment, there’s a reason—either the agency isn’t avidly working to reach a solution or they’re incapable of doing so.

Always choose a collection agency that leaves customers satisfied and produces consistent results.

Effective Reporting and Communication Strategies

When choosing a collection agency, make sure it has effective reporting and communication strategies. How often can you get updates on your case? Does your collector regularly communicate with you? How do they communicate with you? Do they provide regular report collection rates and monthly statements?

Your collector should do all of the above because you deserve access to your results and reports whenever you want. Many collection companies offer virtual portals to view your case information at any time.

Do You Want a Debt Collector That Cares About Your Success?

We’re assuming your answer is “yes.” Partner with Rapid Collections, an industry leader in debt collection that handles over $600 million in collections every year and has a 95% success rate.

At Rapid Collections, we value the success of your business and find the solution that suits your needs. We offer:

  • Supportive services, including AR shared services and consulting
  • Legal representation when necessary
  • 24/7 access to collections software

We help improve the overall efficiency of your AR department so you can avoid working with delinquent accounts in the future. We communicate with your clients professionally and always represent your business well so you can maintain a positive relationship with your customers. If you want a collector that cares or need a small business debt collection agency, contact Rapid Collections today.