Debt collection agencies act on behalf of creditors to collect badly overdue accounts. Accredited agencies work within specific guidelines and adhere to the legal framework set forth in the Fair Debt Collection Practices Act, the federal law that regulates all collection agencies.

There are several advantages to using these agencies –

o Eliminate the hassle of searching for your business debt, saving you time and money;

o Third party involvement in debt collection has been proven time and time again to improve your chances of getting your money back; These people are specialists in negotiating with debtors and the results usually speak for themselves;

or potentially, a skillfully negotiated debt collection could mean continued future custom of the debtor;

o Debt collection agencies may combine sales ledger management and debt collection;

or debt collectors keep you within the law…

The disadvantages are –

o debt collection costs money; you are exchanging the collection of the debt against any charges made by the collection agency and/or a percentage of the money collected (although there are lower-cost flat-rate alternatives);

or the debt collection agency will establish a relationship with their clients that could be potentially damaging if they sour that relationship by not treating bills politely and diplomatically…

Finally, remember to select a reputable collection agency. Don’t just buy at the best price. Remember: disreputable agencies can damage your own reputation and your wallet.