Collection Agencies... - Virtual Assistant Forums

#1 (**permalink**) 01-08-2009

How many of you use them or have had to use them in the past during your VA practice? If you have had to use them at one point in time, did you use someone locally or a fellow VA, another company you found online, etc?

I wonder how many of us have actually had to go through this process or not =)

Interested to hear your thoughts..

#2 (**permalink**) 01-14-2009

I have never had to use one within my business. I have had to use them for clients and when I worked in a hospital I worked closely with a few of them that we used. Once you write something off to bad debt and they end up collecting on it for you, you generally do not get much out of it when fees are added up. You have to decide if the $ to recoup is worth referring it out in the first place.

If you have any specific questions you can send me a PM.

#3 (**permalink**) 01-16-2009

I had the unfortunate experience of working for a collection agency as a legal asst. once. I lasted long enough to know they are extremely effective. They will garnish wages, bank accounts and file lawsuits/summary judgments to put liens on assets such as residences and such at the drop of a hat. I believe as a business owner you get a portion of what they are able to retrieve.

Also, back in the 80's I worked for a criminal defense lawyer who kept putting off paying me. I finally quit and went to the labor board, but he told them I was a consultant and not an employee (and got away with it b/c after all he'd never paid me), so I filed a complaint against him. I got him properly served and then it became a cat/mouse waiting game because he kept sending dr. notes as to why he couldn't appear in court. I finally won because his dr. dated his note for the wrong year and the clerk happily declined same. It was quite another thing collecting on the judgment, but that eventually happened as well.

IMHO, I think after all is said and done, it might be easier to write off small bad debts on tax returns because of all the time invested in waiting out getting paid.

But if I have one suggestion for all small business owners, it would be to paid by check at least once because if you ever do have to sue someone, you will most likely need to know their bank name and acct. no. Maybe there are easier ways to gain that knowledge in the virtual age and such. I'm just saying.

Sue

#4 (**permalink**) 01-17-2009

I had one instance where I considered taking a client through collections - and decided the negative energy necessary to do so (and the time) wasn't worth it to me. I let it go and beefed up my payment policies/deposit requests for new clients.

I did look into Dunn and Bradstreet as an option - they have a few 'a la carte' options for small business owners to use to try to recover monies owed.

I have read a lot of stories on line of other freelancers who did pursue collections and all basically said it was a real drain. I would only go that route for invoices of a substantial amount - but again, would work to avoid it with deposits and ironclad agreements from the start.

#5 (**permalink**) 02-04-2009

I have a question about something that was introduced to me about 3 weeks ago; it is called A/R Factoring. Now I'm not sure if it is the same as sending something to collections, but from what I understand, it is a company that buy's your accounts receivables and they handle the issues with collecting. It is a bit different than collection agencies because you sale them good and bad debt. It is like taking a low interst loan out on your A/R. Has anyone else ever heard of such? The name of the company I'm speaking of is Catalyst Financial Company.

#6 (**permalink**) 02-05-2009

Years ago I did payroll for a start-up temporary service and they used factoring to keep up the cash flow. They used factoring because even though they had a large amount of accounts receivable most of it was Net 30 and they had to pay their employees weekly and needed the cash flow.

Basically they buy the a/r from you for a percentage of what its worth and then they absorb all of the risk for collecting.

#7 (**permalink**) 04-05-2009

From past experience, I would be diligent with your collection efforts. After 90 days, send one final notice, then file with your local small claims court. It's very easy and most states allow the court costs to be added into the amount your suing for. It's not that difficult or stressful. Pretty easy actually. Secondly, if you receive a bad check and it's still not good, some states allow you to sue up to five times the amount of the check. Check with your local DA's office. That's what ours is here in our county. Good luck! PS: In the health care field, the longer an account goes delinquent, the more of a likelihood the malpractice incident could go up. Not that malpractice is the problem, but actually the patient is a deadbeat and won't pay.