With recent unprecedented times putting businesses around the world severely at risk, typical collection agency fees might not be the first thing a company should look at when they are struggling to keep their doors open for business.
But when looking at collecting payment of invoices from late payers, typical collection agency fees can actually be the difference between staying afloat and the slippery slide to insolvency before your company’s time.
Some collection agency fees can be misleading & complicated
So we have put together some key facts to consider about typical collection agency fees, in order to give you some insight. This could influence how you choose which company to help you keep a positive cashflow in place:
1. “No Win – No Fee” doesn’t always mean No Win – No Fee:
Many collection agencies will advertise very low fees to collect your debt. But this can often be a road to more expensive legal charges further down the line. Often only 1 letter with little commitment to collect your debt is the course of action they will take. It is always best to ask your collection agency exactly what the process is for collection, and how they intend to proceed if the debtor doesn’t pay at No Win – No Fee stage.
2. The lower the commission doesn’t mean you will get the best service:
You pay for what you get! Typical collection agency fees can be very low in order to attract enquiries, but the quality of the work may not match their marketing efforts. Be wary of very low commission rates as they can often be too good to be true. You should always check out testimonial pages for proof they have a solid track record of collections in industry sectors similar to yours.
3. Recovery of costs & interest are not always included:
Collection agencies should be doing their very best to recover extra costs involved in the collection of a debt. You should always check that recovery of costs is a priority if you are considering typical collection agency fees. Costs and interest are recoverable by UK law and every effort should be made to get you back to a No Cost situation. The debtor should always be covering your costs for debt recovery.
So we hope the above facts about typical collection agency fees are helpful as your business looks to recover and prosper from the pandemic sweeping the globe in 2020.
Typical collection agency fees are important to consider
Our feeling is that businesses should always prioritise cashflow. Companies who are 100% focused on collecting debts in the next few months will prosper. We believe many can grow into a stronger, more leaner company in the months and years to come.
If you would like to speak to one of our debt collection experts about typical collection agency fees to help your business through the pandemic in 2020, please don’t hesitate to call us today on 01332 565 350 or email firstname.lastname@example.org