While most entrepreneurs are struggling to survive in the down economy, small business collection agencies are growing at a high rate.  The reason for the growth is directly related to more consumers falling past due on payments because they have lost a job or had hours cut back significantly.  Small business owners are looking for a way to recover the money they are owed.  Collection agencies are becoming part of the accounts receivables plan that once seemed unimportant during the boom economy. 

Many entrepreneurs created a small business with the plans of selling items or provide service on credit. While this is a great way to boost sales, it also leaves the business open to the risk of customers not paying the bill on time.  Many small business owners are finding out that when the economy slows down, so will the payments that once came in like clockwork.  Beyond sending past due notices in the mail, many small business owners do not have a plan for how to collect from these past due accounts.  Utilizing a small business collection agency can be the best strategy for a business owner holding several past due accounts.  Collection agencies are professionals; they understand how to collect the debt in a way that will follow all FDCPA regulations.  Due to the recent changes in technology, it can be nearly impossible to locate a past due debtor.  Debt collection agencies have skip tracing software that allows them to access several databases of information.  By performing skip tracing, they can locate new phone numbers, mailing addresses and more information that will help contact the past due debtor.

Locating a past due debtor can be a frustrating task, with several failed attempts before finding the right phone number to reach the debtor at.  Many times, the collection agency will leave messages with family members or place of employment which will then get returned by a furious debtor.  The debtors are embarrassed that a family member is being contacted over a debt they owe.  After the good number has been found by the collection agency, then the experienced debt collectors will go to work.  Debt collectors know how to negotiate payments with the debtor that will be in the benefit of small business owner.  They will get as large of a payment as possible and bring the account back to a current status so that the customer is paying on time. Small business collection agencies are able to communicate with the debtors in a way that will preserve the businesses reputation but also stern enough to make sure the payment is secured for the coming months.

Small business owners are looking for every dollar they can find to survive the current economy.  Collection agencies are not only able to increase revenue by collecting on past due customers, but they are also helping retain customers for repeat business.  Often times, a customer will forget about the bill because they moved addresses and changed phone numbers.  Once reminded of the past due payment, they will quickly pay the entire amount and return to the place of business to do more business.  Some customers who had no intentions of ever paying may not return, but many debtors will because they enjoy doing business with the company they owe money to.

Hiring a collection agency is never a fun experience for a business owner but having a collection agency is essential to managing past due accounts.  By having a good collection agency, revenues will be increased and also should allow a small business owner to offer more products and services on credit with the confidence of knowing that a collection agency is on call whenever the need arises.

Luke McCann is the owner of DebtCollectionQuote.com, working in the collection agency industry for over a decade helping small business owners create successful relationships with collection agencies.