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There are only a few ways to collect money

Call – phone negotiation and demand is the best way to collect money.

Letters – demand letters are a great way to collect money. But letters as a whole do not leverage the customer to pay – they do highlight the matter though.

Field Calls – in person. If you cannot get in contact with a customer by phone or letter, a field call can bring results if you use professional and trained field staff.

Legal – once qualified that the customer has capacity to pay and/or possibly assets available to seize, then legals, while the last resort is a great option. Do not ever let an agency go to the legal stage without your signed off approval and a legitimate quote as to how much that action is going to cost. Make sure the agency advises you why they recommend that you go legal. Importantly, if the customer’s whereabouts is not known or if you do not know if they are employed or trading then it would be strongly advised not to proceed. A property search can also be critical before going ahead to ascertain if there is an asset available and in what entity may own it. A good agency will tell you that if they do not feel that they can get a positive result then you should walk away rather than take a punt. It is usually good money after bad if you do not have those basic facts covered in the first instance. While you may be upset that you have not been paid, it is best that your agent tells you that rather than string you along for more costs.

You can always hold the debt for a while and re-address it down the track. This is called “parking” the debt. However, if a company has gone into liquidation or an individual has gone bankrupt then your only action is to file a proof of debt – you cannot collect on this debt later.

Debt collection is a very simple business – you can either make a call, send a letter of do a field call. If they then do not pay your options are to go legal, park the debt and wait or abandon the debt.

Many agents come out with statements such as “we have cutting edge technology, state of the art processes, we have enhanced our capacities around our platforms and by using mixes of social media, international best practices and our own methods, we can collect better than anyone in the market!” Some of those things help. Some of them are very productive. Some are just confusing and while sounding effective are probably doing just what another/every other agency is doing. Find an agency that will tell you in simple terms how they operate, can prove what they do is ethical and within regulatory laws and then agree on performance measures with them.

Ring – negotiate – collect. Those are the basic steps.

Image from http://www.flickr.com/photos/59937401@N07/

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