How does Commercial Debt Collection work for a Typical Company?



How does commercial debt collection work for a typical company?


Companies that decide to hire someone to do Commercial Debt Recovery will often wonder how the process actually works. What does the collection agency they hire do to try to recoup the money owed to them? How long does getting debts paid generally take, and what percentage of debt payment can they expect?


How does an agency start commercial debt collection? -- The process to recoup a company's outstanding bills usually starts with a form letter sent to the company. This will be followed by another much more stern letter a week later.


If the bill is not paid then, several phone calls will be made. First asking why the bill has not been paid, then followed up by calls threatening legal action if the bill is not paid within a specific time.


Legal action as part of commercial debt collection -- Legal action is the final step for a bill that is so far beyond the due date, and has still not been paid. This is usually begun after progress has not been made by letters or phone, and will start with a lawyer's letter.


If the bill still remains unpaid after this, and the amount owed is large enough, court proceedings will then often be started. The business owing your company money will then be taken to court, where the debt will usually be declared mandatory payable by the court. During this last phase, the repayment rate is very high.


How long does the process take and is it successful? -- The process of receiving payment for an outstanding bill can be anything from a week for those that pay immediately to many months for those that do not.


The success rate can be 11 percent up to 20 percent if you take the company to court, and win your court case.