The Difference Between Commercial Collections And Consumer Collections And How We Can Help
The Difference Between Commercial Collections And Consumer Collections And How We Can Help
When it comes to collections, there are two types to consider: commercial and consumer. The kind of collection dictates how it’s handled, as there are regulations both on the state and federal levels. Collecting debt from a consumer is an entirely different process than getting money from another business. As national debt collection lawyers, we handle both types of debtors and know the regulations we must follow with each one.
Consumer debts are often referred to as retail debts, as expenses from retail establishments incur these bills. These debts would include charges made on a credit card for clothing, food, or other goods for the household. Other things that fall under consumer debt include outstanding pest control, plumbing, or veterinarian services.
Commercial debts categorize anything that is done business to business. It includes sole proprietorships and partnerships as well as corporations and mid-sized enterprises. Any products or services provided by one business to another fall under this category. Why choose us to help?
Our team is well-versed in collection processes for both types of accounts. We strive to get your AR balances brought down, and we want to enhance your business by reducing the balance that you must write off to bad debt.
The Legal Differences in Consumer/Commercial Collections
The Fair Debt Collections Practices Act has strict guidelines we must follow. However, these guidelines are only dictated for consumer debts, as there are no such regulations regarding commercial accounts.
The state is often the entity that governs commercial debt collection. Many states have regulations regarding these practices. They require nationwide consumer debt collection specialists to be licensed within the area where they’re collecting or where the debtor conducts business.
Since we are licensed in all 50 states, we can do debt collections for any business or corporation within the confines of the law. This allows us to help our clients regardless of geographic location. Our goal is to ensure that we do everything in a legal and ethical way, so we can collect the debt rightfully and without issue.
What Are the Challenges in Collecting Debts?
There are many challenges when attempting consumer debt collection. Since we live in the digital age, finding people is becoming less of a hassle thanks to social media and accessible online information. The major problem is when we find information it may not be accurate as they’ve moved, and the records haven’t been updated.
It’s often commonplace that people move around a lot, especially if they’re having financial issues. If the debtor is staying with a third party, we have no way to find out that information. If you can’t find the debtor to speak with them, you can’t collect the debt. Tracking down people can take a great deal of effort, which the average business owner doesn’t have the time to do.
Commercial debt recovery is just as challenging, but on the opposite end of the spectrum. It’s not as simple as calling the debtor and asking them to pay the bill like you would a consumer. Here, you must go through a chain of hierarchies to find the person who cuts the checks and has the authority to authorize payment. Every company is set up differently, and for some, you must get to the owner to get the bill paid.
Another common problem in commercial collections is the size of the debts. When there’s large amounts of money owed, we often need to get the court involved, obtain judgments, and hit their consumer reports through Dun & Bradstreet to get things paid.
The good news is that it’s easier to collect from companies as they want to retain their business relationship. Additionally, while they may fall on hard times, they typically have more significant cash flows than the individuals. Regardless of consumer or commercial collections, having a national debt collection attorney assisting is wise.
Reclaim Your Finances: The Benefits of Nationwide Personal Debt Collection
Outstanding accounts receivables are a huge problem for any business. According to a study, 11% of mid-sized companies stated that most of their invoices are paid after the due date.
Your accounts receivable is the backbone of your company. If you go to apply for any loan, they always want to know what your receivable amount is, as this is considered a portion of your business’s net worth. How fast you collect this money is determined by many factors.
In-house collections should get invoices out promptly, and there should be past-due notices and follow-ups. Please make sure to do something about it before the invoice is 90 to 120 days past due. Getting a debt collection law firm involved in the case can escalate getting your money, and we’ve dedicated our focus to such activities.
We know you’re busy, and often, collections get pushed to the side because of time constraints. When you have a significant amount of outstanding accounts, and you allow this to continue, it will only cause you issues with cash flow. You can’t keep sending products or providing services and not being compensated promptly, so it’s imperative to have collection processes in place.
National Collection Lawyers Can Help
There are many ways to collect debts, but one of the most effective is having a nationwide debt collection attorney assist. It carries much more clout when a law office calls or sends correspondence to settle past-due accounts. Since it’s an extensive process that requires many letters and phone calls, it’s always best to have well-trained representatives handling it for you.
While you have 101 things you must do daily, collections are our primary focus. We strive to ensure that we collect your debts and put the cash flow where it belongs, back in your pockets. If your receivable balances are way too high and you’re struggling to collect past-due invoices, call us today for a free consultation to see how we can assist you.