What is Commercial Debt Recovery and Should Your Company Use a Service?
If another business owes you money and you plan on contacting them asking them to pay, that is what is called commercial debt recovery.
Some companies do their own Commercial Debt Recovery, while others pay a service to do it for them. Here is what you need to know about both.
Doing your own commercial debt recovery -- While this can be an effective way to recoup money that is owed to your company, it can also be extremely time-consuming.
In many cases, you will need to have a dedicated staff member responsible for all debt recovery. That means, when you do recoup money owed, you will also have to take into consideration the cost of that employee's salary to calculate how much money you actually received.
Doing commercial debt recovery via a service -- One of the better ways to recoup debts owed is to hire a recovery service to do it for you.
The benefit of using this type of service is most services only charge you a fee if they recoup the money owed. That means, if they contact a business and they refuse to pay, you do not have to pay for their efforts.
As a good commercial debt recovery service often has an up to 20 percent success rate, if you are owed money by many businesses, this can be the effective way to go.
Calculate the costs -- The best way to decide if you will recover debt yourself or via a service is to calculate all costs, including your employee's salary.
This will show you the most cost-effective plan.
