As of late 2018, Americans are a whopping $13.51 trillion in debt. Meanwhile, the average U.S. household owes an average $135,768, of which $6,929 is revolving credit card debt. Considering that these figures are only set to grow, there’s a good chance that as a business owner you’re going to run into a delinquent customer.
When seeking to recover debt, your business will consider partnering with a debt collection agency like ours. At Summit A*R we advise that you do this sooner rather than later because statistically, debt is harder to recover with time. Although we do have excellent tools in place to locate hard-to-find people, like an entire skip tracing department led by a private investigator, we also believe in being vigilant.
The following red flags are a strong indicator that you’ll need a debt collector.
#1 They Refused Credit Checks
From landlords to veterinarians to telecommunication companies, more businesses are conducting credit checks before doing business. In the United States, the three main credit bureaus are TransUnion, Equifax, and Experian. These companies collect debt information about customers from most businesses, which is stored and analyzed. Later, this data helps other businesses calculate the risk of doing business with a customer.
Certainly, credit reports are a vital cog of the American consumer economy. Consumers care about them too. We know this because they are an important debt collection tool. At Summit A.R. we follow the P.H.D. Philosophy” (Preserve Human Dignity) philosophy, which means that we treat accounts with dignity and respect. Instead of using robocalls, threats, aggression, harassment, and other dirty tactics, we approach people with sensitivity and compassion. Despite this, you’ll be surprised to know that we boast twice the national debt recovery success rate. If you have debt collection needs, then see how Summit A*R can help you recover it in an ethical and effective manner.
We believe that most debtors are good people and want to pay. And we encourage them by offering manageable options. Unfortunately, some delinquent accounts need sterner incentives.
Statistically speaking, customers are more likely to clear their debt if their credit rating is on the line. Unlike your credit department, we can report a delinquent customer to the three major credit bureaus mentioned previously. Because debtors realize this, they’re less likely to pay you than us. If they forget, a subtle reminder is usually enough to motivate them into cooperating with us.
However, sometimes a customer is unwilling to clear their debts, despite the warnings. Here, a business like ours will report them, blemishing their record. A customer refusing a credit check usually indicates bad debt. If you’ve still done business with them despite this, then you’re likely to face a delinquent account down the road.
#2 They Didn’t Offer References
It’s a challenging climate for businesses. Costs are rising, competition is tough, and customers are more demanding. In this situation, you may agree to do business with a customer who refuses a credit check and doesn’t offer references. These are usually red flags as most people are proud of their track record.
However, not all hope is lost. At Summit A*R we can help return your lost revenue. What’s more, our percentages are reasonable, and we only work on a contingency basis. When recovering debt, we only get paid if you get paid.
#3 They Didn’t Want a Contract
This will seem obvious, but there’s no legitimate reason for a client to refuse a contract. After all, it protects both parties. A customer who insisted on a gentleman’s handshake is either an English time-traveller from the 1500s or trying to take advantage of you.
#4 They Made Excuses
This is the digital age. Even at Summit A*R, we allow our clients to check the status of their accounts through a secure client access portal. If your customer claims that they haven’t received your invoice, or that their check was lost in the mail, then ask us for assistance.
On the other hand, a business with legitimate issues will ask for the payment to be rescheduled rather than try and buy time disingenuously.
#5 They Are a Small Business
This may sound cruel, but statistically, small businesses are more likely to close than larger enterprises. If your payment is overdue from a small business, especially a new one, then your transaction may be at risk. It’s important to quickly give us a call if they’re offering half-hearted excuses. In the unlikely event that they declare bankruptcy, the recovery process will grow more complex.
#6 They Stop Responding to Communication
Nothing raises a red flag faster than a customer who stops answering emails and phone calls once payment is past due. It’s especially alarming if the registered mail you sent them starts bouncing too. After a reasonable amount of time has passed, give us a call to recover your revenue.
#7 Their Reputation Starts Taking a Hit
Keep your ears open. It’s a red flag if your client hasn’t paid your competitors or is delaying their staff’s salaries. If they also owe you payment, then get Summit A*R on your team for help.
#8 They are Hypercritical
While some clients are naturally nitpicky, others find fault with your work only to try and score a discount. Be wary of such clients because they are less likely to pay their dues. Similarly, avoid clients who are unsure of what they want. If they’re reluctant to do business with you then they’ll be reluctant to pay you for your work.
If you ignore these warning signs, then you’ll probably need the services of a debt collection agency. At Summit A*R, we believe that prevention is better than cure. Follow these tips for getting paid on time to avoid the anxiety of outstanding A/R.
Keep in mind that Summit A*R also offers pre-collection services. Instead of losing sleep over collecting payments, you can outsource your current A/R cycle out to us to represent you professionally and effectively. But regardless of where you need us, we’ll be there to help you with your collection concerns.