Category Archives: Business Debt Collection

Third Party Business Debt Collection to the Rescue

If you’re like most business owners, you have heard the stories about how a certain organizationAssets 1 hired a business debt collection agency to handle delinquent accounts and they lost a good portion of their customer base due to how poorly the debt collector treated the delinquent accounts. While the industry does have a few dark stories in its past, today’s debt collection industry is thriving with ethical firms ready to serve you and help retain your customer base.

Since the Fair Debt Collection Practices Act went into effect in the late 1970s debt collection agencies have put into effect quality debt practices that protect consumers. Reputable business debt collectors applaud the strict efforts on behalf of the federal and state governments that regulate the debt collection practices that keep consumers safe.

Now that we’ve addressed your fears about partnering with a collection professional, let’s look at some of the perks you’ll see once you’re hand-in-hand with a third party agency.

  • Your Staff Will Have More Time
    Too many businesses make valiant but failed efforts to collect debt by using staff members who aren’t trained in the ways of business debt collection. When you partner with a professional, your staff suddenly has more time to put efforts toward building up your business rather than getting mired in paperwork and under-delivering on their debt collection tasks.
  • Third Parties Don’t Get the Cold Shoulder as Often
    Consumers must face the facts when a third party debt collection agency contacts them, which motivates them to get current on their account(s). It’s not due to an intimidation factor – it’s mostly due to the fact that professional business debt collectors know how to communicate with debtors and are persistent enough to let the consumer know that the debt isn’t just going to go away on its own.
  • You Can Stop Worrying About Court Action
    Even though you think your staffers are really good at staying in line with the latest rules and regulations regarding collecting debt, they can’t keep up with all the changes. This puts your company in a bad spot because it leaves you vulnerable to court action by consumers who feel you’ve violated their consumer rights. Debt collection agencies are staffed with lawyers who know exactly how to communicate with debtors.
  • You Will See Increased Collection Amounts
    Again, you did your best with the staff you have at the office, but they are no match for the services a professional can offer. They have the hardware and the software, as well as the training to use it, to get the job done faster and with more efficiency than anyone on your staff ever could.

Omega-RMS, llc., is a debt collection company that has the professional staff willing and ready to help you collect on your unpaid accounts. Stop wasting your resources and partner with a business debt collection specialist that will offer you an excellent return on investment. If you’re serious about improving your cash flow situation, you’ll contact us today.

Business Debt Collection to Assist Small Businesses Struggling With Late Payment Excuses

Collections 11Small businesses struggle to grow for many reasons. One of those reasons is having too many clients who refuse to pay on time. Business debt collection is often attempted and many times is not successfully carried out with in-house attempts.

A survey commissioned by a debt recovery firm showed that 75 percent of all small businesses experience problems with late-paying clients. They all seem to have excuses why their money goes to other entities rather than toward their debt with the small business.

The small business owners are often the most affected by these late-paying clients. Most of the time, they accept the excuses and offer extensions. About 10 percent of the business owners said they don’t want to risk getting a bad reputation, so they don’t chase after the bad debt. The smallest of businesses seem most affected – companies with fewer than 10 employees said they only receive payments on time from about 45 percent of their clients.

Less than 20 percent of the businesses in the survey said they chase debt, but not to the point of bringing legal action against the client. Again, they fear that a heavy hand will hurt business in the long run. This ultimately stifles business growth because the business owners don’t have the cash flow to invest back into the company. Sometimes, it’s so bad that they will fail to make utility payments or payroll. In extreme cases, it completely shuts the business down.

Extending credit to clients is an excellent way to bring in more business, but it also comes with a degree of risk. However, when partnering with a third-party receivables and debt collection company, the risk is reduced. For example, if a company sells its receivables to a third party, they get their money up front, which improves cash flow and stimulates growth. On top of that, the company that sells receivables has also rid itself of the time-consuming billing and debt collection efforts. These employees can now focus on more important items that will bring in more profits for the company.

Business debt collection is a slippery slope when attempted by novices within the company. The most common reason for businesses to be taken to court is because of their debt collection practices. It’s clear that when chasing down debt, not only are in-house efforts landing the company in court, they often fail to get clients to pay up.

Partnering with a third party that has the knowledge, training, expertise and technology to bring these clients to payment terms that work is the solution that counts. Some companies have clients spread throughout the nation, which means the debt collection attempts need to be carried out by a company that is licensed and bonded to collect in every state.

Omega-RMS, llc., has the credentials and the expertise to assist small business in gaining ground on their receivables. Everybody has an excuse and Omega-RMS employees are trained to listen to those excuses while offering a professional approach to a solution. You want you clients treated with respect, which is what Omega offers.

How Does a Government Shutdown Affect Borrowing and Business Debt Collection

Graph 1According to the American Banker Index of Banking Activity, there was a negative impact felt between September and October in correlation with the government shutdown.

The index was down to 54.6 in October, a 1.2-point drop from September and the lowest it’s been since January. Commercial loan delinquencies tend to be the most susceptible to change with a spike in June, a dip in July, and climbing again through September.

The impact the 16-day shutdown had on small businesses was seen most readily in the delays it caused to processing loans. Bankers were a bit edgy about lawmakers’ reluctance to work out a solution to the ongoing debt ceiling issues and it made them reluctant to approve loans for small businesses.

Consumers were also reluctant to take on debt. Applications for consumer loans dropped in October, which was the first time that happened since 2012. The commercial side of the lending industry looked slow, but was still expanding.

Whenever the index reads above 50, it indicates more activity, or expansion. Whenever it goes below 50, that is evidence of contraction. Also, readings above 50 on indicators like loan delinquencies or loan rejection rates would indicate a drop in business activity. What bankers noticed during the shutdown was that the businesses that had the best credit ratings were the ones not applying for loans.

During the shutdown, lawmakers knew there would be thousands of government workers without a paycheck, which means they couldn’t stay on top of their bills. A Virginia lawmaker proposed in his legislation that debt collection activities should be limited while the government worker is temporarily without work.

Because the Consumer Financial Protection Bureau (CFPB) is funded through the Federal Reserve, it was one of the few agencies that remained open during the shutdown, which means business debt collection efforts were still being monitored. The CFPB continued to work with consumers to develop strategies to rid the industry of bad practices.

The CFPB has been handling complaints against the debt collection industry since July. From July until November, the CFPB accepted about 15,000 complaints per month and made public about 5,600 of them. The problem with the complaints that were made public is that they only included ones where a business debt collection agency recognized by the CFPB had responded to the complaint. This means the public reports didn’t include the anonymous scam artists or the companies that weren’t recognized by the CFPB.

Omega-RMS, llc., welcomes further scrutiny of debt collection agencies. As a leading provider of debt collection services, Omega has more than four decades of experience in providing legal, ethical and professional services that has earned the company a spot as a member of the Association of Credit and Collection Professionals.