The debt collector: roles and responsibilities

Written by: Momie Tullottes

Working with a debt collector can help you avoid uncomfortable situations like this:

- Charles: Mary, when I spoke to you last week, you said you would pay me Thursday. It is Sunday, and I still see no evidence of a payment.

- Mary: I'm sorry, Charles. I tried to get a payment in, but I just can't right now. Can I have another extension?

- Charles: Mary, I've already given you three extensions. I can’t afford to wait for this payment any longer.

If this string of communication seems familiar, you’re not alone. In addition to making you uneasy, having to go back and forth with a client for a past due debt can be time consuming. Instead, a debt collector can help take away some of the stress involved and allow you to focus on more pressing business tasks.

What is a debt collector?

A company or private party often hires a debt collector to help collect past-due monies. There are many ways that a business can benefit from using a debt collector’s services. Some of the benefits are obvious like retrieving debt that you don’t have to collect yourself. However, there can be other more subtle benefits as well.

What types of services can debt collectors provide?

A debt collector can handle the job of contacting your clients when they’re delinquent in paying money they owe you. Debt collectors can handle phone calls, bills, and other correspondence related to the delinquent client’s financial obligations.

It can be difficult to collect debts. Clients may give any number of excuses or reasons as to why they can’t make payment. As previously mentioned, this can pose a problem, particularly if you have a long standing business relationship with the client. It’s difficult to put personal feelings aside, but you rely on that money to run your business. A debt collector doesn’t have the emotional attachment to your clients that you do. Their sole responsibility is to collect the money you’re owed.

Debt collection agencies often will keep track of all correspondence with your clients. In some instances, this won’t be needed. Just getting a phone call from a debt collector is typically enough incentive for many people to go ahead and make the payment. However, in some situations, people either don’t have the ability to pay or will flat out refuse to make payment. In some of those cases, it may go to court. The records that a debt collector will keep can provide evidence in the case of your business.

How do I choose a debt collector?

When choosing a debt collector, you should learn about their track record and level of experience. You want to find a debt collector that best suits your business needs. A good collector will be able to handle collection matters swiftly and legally in a way that benefits your company and follows its policy.

Use BuyerZone’s free request for collection services price quotes to get matched to multiple agencies in your area.

Resources used for this article:
Investopedia, "Debt Collectors Love The Sound Of Credit Crunching"
The Article Insiders, "How to Use Debt Collectors to Avoid Business Losses"