Businesses, no matter what size, that rely on cash payments instead of credit cards, frequently need to turn to a business collection agency to assist in the collection and satisfaction of overdue accounts.

Collection agencies have a few different ways to help you collect your bills. Very few request an upfront payment. Most just work on a contingency basis. In other words, they make nothing unless they successfully recover some of your past due accounts. This explains why so many consumers complain about harassing phone calls from collection agencies – they are desperate to make money and get paid.

Before signing a contract or providing information on your clients, call the Better Business Bureau and check on reports. If there are a few consumer complaints, especially ones that aren’t resolved, you should stop right there and find someone else. Remember, your reputation is at stake, too.

Before committing to any agency, check with the local BBB to see if they have any complaints against them. You should focus your efforts on building a partnership with a reputable firm that won’t cause you any problems.

Expect to pay about half of what they collect for you. Even though this figure might sound pretty high, just keep in mind they are the ones doing all the work. Aside from phone calls and letters they may need to file court documents, hire additional staff, or even travel to the client location.

If you prefer you can choose to work with an agency on a retainer basis where you pay a fee every month in exchange for unlimited services. This might be a good idea for large companies who have an ongoing problem with unpaid bills, but it probably isn’t a good idea for a company that only needs sporadic collection services.

Usually a collection agency isn’t asked to pursue overdue accounts for three or four months after they become past due. Think twice about how you handle these accounts – if you have some long term clients who happen to be experiencing financial trouble, you may not want to lose their future business by putting a collection agency on their account.

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