How Does Commercial Debt Collection Work if You Hire a Service to Do It?

     

The world of commercial debt collection can be a little confusing. This is particularly true if you have not paid a service to do it for you in the past.

What is commercial debt collection then, and how does it generally work?

What is commercial debt collection? -- This is the term that is generally used for when one business goes after another business that owes them money.

The collection is usually done by a service that specializes in Commercial Debt Recovery.

How does it usually work? -- The steps are similar no matter what service you hire to do the job.

Your first job will be to furnish the service with the names, contact information and amount owed for every company owing you money. The service will then contact each of them and ask them to pay. This contact will be in the form of letters, followed by phone calls.

If companies do not pay, this could even escalate to the threat of a lawsuit or a lawsuit being filed. This, of course, would be subject to your approval as your company would be the one named in the suit.

How successful is commercial debt collection? -- This depends on the service you hire but, in most cases, a very successful rate of payment is between 15 and 20 percent. It is rare to ever have a success rate higher than that.

If some of the companies owing you money owe money in the tens of thousands of dollars, however, even a 20 percent success rate can help you recoup a large amount of money.