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6 Tips for Small Business Owners: How to Recruit A Debt Collection Agency

6 Tips for Small Business Owners: How to Recruit A Debt Collection Agency

Small business owners face the challenge of managing their debt levels at acceptable level because if they don’t receive the cash against their services or products, then they are doomed to get into bank debt and their cost of doing business increases.

Small business owners also face the challenge of finding right debt collection agencies, so that they not only ensure cost optimization, but also make sure that their receivables remain at lowest level. Let me demonstrate to you how you should go about recruiting a collection agency, with examples from three collection agencies.

1. Experience

Experience is probably the single most important thing to consider when choosing a collection agency. Cumulative experience of over a decade is nice decent experience and speaks volumes about the success rate of the company. Companies which are relatively new in the market can try to beat others with pricing, but experience always count.

For example, New World Collections is probably one of the oldest debt collection agencies in one of the US States, working since 1997. Twenty successful years of business means, the agency has mastered all the legal risk and complications of collecting your money from your clients.

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Our second example, Eagle Accounts Group, has a total experience of approximately 7 years in industry,

2. Recommendations

The experience of a friend-social signals (i.e. the word of mouth) is another extremely important criteria to look for. Approach your friends who are doing business and ask for their suggestions. If you cannot find one, try to contact your local associations and trade bodies and they will greatly help by sharing with you the experience of their members with any collection agency you want to work with.

New World Collection is important to me because a friend has first-hand experience of working with them. What I learned from the personal experience is that the agency specializes in debt collection for dentists and carries other medical debt collection expertise also.

3. BBB Accreditation

Responsibility and conduct are other important criterias to look for as collection related matters can push you to the court. The legal risk of hiring a collection agency remains; you should therefore look for the ratings of external agencies, such as BBB, to understand the past behavior of the collection agency with others. Reading online history of the company on BBB website is a good free way to firm up initial opinion.

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If you review BBB profile of New World Collections, you will find that it has zero complaints since last 3 years and some excellent reviews. Eagle Accounts Group’s website does not provide any indication whether it has been reviewed by BBB or not. However, my search on BBB website indicated that it has been reviewed by BBB. BBB received 1 complaint during last three years for collection issues and the website indicates that consumer did not accepted the resolution. It even contains 1 negative review about the service with no positive reviews.

For a small business owner, it is extremely important that the debt collection agency works with responsibility and provide the value for the service. To establish a long term relationship with any debt collection agency, it is extremely important that both parties mutually agree and work out affordable solutions.

Our third example agency, Allied Collection Services’ BBB profile suggests that the agency received 4 complaints during last three years however, there are no reviews available. BBB is being an unbiased, and professional bureau offers a good opportunity to any small business to actually understand and review the service before working with them.

4. Reviews

Reviews on yelp or yellow pages is also another great starting point. What I have found great about New World Collections company is that it has some really great reviews on the sites which are unbiased and credible.

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5. Size of the Agency

Large collection agencies have diverse experience therefore they cover different industries. They may not be good for you as their overall breadth of services may not be tailor made to your requirements as a small business owner. Big agencies can offer you cost advantage because of their expertise and reach into the market.

If you want to cut the cost and recover your debts with minimum cost, large agencies may be of great help, but make sure you are not getting minimum services with such low costs. Large agencies may also offer you help in terms of legal advice.

Allied Collection Service is relatively large collection service with more services to offer and to me, it is also one of its weaknesses. Generally, the businesses which offer large amount of services tend to lose their standards and fail to develop specialized set of services.

If you are a small business owner and not in the medical profession or provider of medical services, large service may not be for you. For effective and specialized services, you need a small but focused collection agency.

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6. Other Services

Increasingly small businesses are working outside their original States also by providing online services. New World Collection is great in the sense that it also provides services in States such as Georgia, Indiana, and Kentucky. You can even track your account status through their well-developed web portal.

Allied Collection Services also offers secure online access to the web portal and offer language interpretation services also, which ultimately increases the cost for a small business.

The above demonstration gives you some important insights to look for when reviewing or searching for debt collection agency. Experience is probably the best indicator of whether the agency is worth working or not. Apart from this, you also need to see if the business has been performing ethically and responsibly for which checking BBB profile of the business is must. It gives you an indication of whether there was any complaint against the agency and if there was any, what was the outcome.

Irrespective of your location, if you are facing the uphill task of collecting your debts from customers, you need a debt collection agency and above is just a demonstration of how and what you should look into initially when you plan to hire external help for your debt collection. Good online reviews and a search on BBB can offer you a good initial feedback before you narrow down your search to hire debt collection agencies.

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Adnan Manzoor

Data Analyst & Life Coach

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

Reference

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