Monitoring collection agency performance

Article Abstract:

Following up with collection agencies after accounts have been placed with them is essential to achieving good returns on accounts receivable. Collection agency monitoring procedures should include: status report preparation, internal tracking of accounts and cumulative agency reports. These aspects of managing services provided by collection agencies are discussed. The agency's performance should be judged according to collections as a percentage of dollar amounts placed, rate of return on collection agency fees paid, and average time lags between account placement and receipt of collection. In addition to the measurable judgment criteria, subjective criteria should be considered when continuing or discontinuing relationships with collection agencies; the agency's honesty when reporting collections is chief among these.

Controllership

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Making credit collections cost effective

Article Abstract:

Past a certain age, all accounts receivable become the object of collection efforts. Choosing between collection agencies and collection attorneys for performing these efforts is discussed. Aurora Pump (an Illinois corporation) turns over accounts with receivable balances of $5,000 or more to collection attorneys, who are paid by the hour rather than the usual 15 to 33 percent contingency. This practice has resulted in Aurora's 79.7 percent collection rate for large-dollar accounts receivable, at a collection cost rate of 11.8 percent of the amounts collected.

Services, Law firms, Bad debts, Credit management, Aurora Pump

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Speed collections by 'liening' on debtors

Article Abstract:

The mechanic's lien, a claim against property, can be used effectively to secure customer payment in a timely manner. One of the major reasons for filing a lien is to protect a creditor's claim under the Bankruptcy Act; typically, courts will give the lien holder priority when a bankrupt firm's receivables are placed under the court's jurisdiction. Another reason to file a mechanic's lien is to motivate customers to pay more promptly. Details of filing a lien, timing considerations, and the filing procedure are discussed.

Practice, Assignments for benefit of creditors, Mechanics' liens

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