It is estimated that after the global pandemic, utility bill debt in the US amounts to around $40 billion. This total is only set to increase as prices rise. If you own a utility company, do you have the time and money to claim it back?
If not, then there is a solution. Read on as we discuss why you need to hire a utilities debt collection company.
1. Faster Payments
With a debt collection agency to help, you will find people pay outstanding utility bills faster. On collection, money can often transfer to your account immediately with the use of integrated payment processes. This means you get the money you are owed much quicker.
One of the benefits of debt collectors is their ability to provide flexibility for all situations. They will understand a company will have needs that change and that it is important to scale up or down to support these. A company may have times when it needs to claim back lots of outstanding debts or none at all.
There is also a great degree of flexibility in how you pay. Some companies may take a commission on the amount paid, while others will charge a flat fee. You can also consider selling the debt outright to a collection company in some cases.
3. Legal Protection
There are numerous laws at both federal and state levels regarding the management and collection of debt. Collecting these debts on your own is very dangerous if you don’t know them. Any errors can leave you as the party accused of wrongdoing, and people will not hesitate to sue.
When you are hiring a collection agency, their representatives will have experience and training in the legalities of the trade. Make sure the company is licensed, as it shows you they are covered and up to date with modern practices. Not only does hiring a company cover you legally, but it also covers you from the physical dangers of attempting to collect debt on your own.
Hiring a collection agency is not just about paying them to go and claim the debt. A lot of work also goes on behind the scenes to protect your debt and themselves. This involves creating detailed records of communications with the people who owe money.
This can help in several ways. For example, you may decide to write off the debt as a tax deduction, and this evidence will back up the claim. The IRS will want to know you tried everything before allowing a debt write-off.
Documentation will also be helpful should you decide to sue and take the debt to court. You will have sufficient evidence you did everything you could to claim the debt. All of this paperwork will get collated by the company on your behalf.
Finally, you may have a time when you are due an audit. You will need detailed documentation on the debts owed and claimed. This will take your accounts department a long time, which can be cut drastically with the documentation provided by the debt collection agency.
Your focus should be on growing your business. Trying to find those who owe money, let alone get it from them, is extremely time-consuming. It will take your focus off what matters, which is running your organization.
When you hire a collection agency, they will know the best techniques to get debt from those who owe you. They have access to collection accounts which can damage credit scores. Thus, they pose more of a threat than you do, and many people are more willing to pay back to avoid the long-term financial damage.
Many use a technique called skip tracing. This is a method in which a customer who has left town and refuses to answer communication channels is found. This can be very useful for larger debts, where people may have moved house to a different location and not informed your utility company.
The job of a collection agency is not just to reclaim debt but to resolve it. Utility bills can mount up quickly, and situations occur when the money is not there to claim back. If they are dealing with a business close to bankruptcy, then they may recognize that if the company goes down, your debt will probably go with it.
In these situations, different tactics are required. They may give people advice on managing debts, setting them up with a plan to pay the money back. Ins some cases, they may even be able to give your company advice on credit management.
Crucially, they will also be able to advise when litigation is required. Filing a lawsuit is an expensive process and not one they will take lightly. However, it is something they will do if they know you have a good chance of getting money back, or a summons may scare a customer into paying.
7. Increase Cash Flow
As a manager of a utility company, you will have a lot of different income streams from various customers. That means, unlike most companies, you may have a lot of smaller debts instead of fewer large ones. By calling the debts in at once, you can get a boost to your cash flow and revenue.
Debt collection agencies will consistently manage the cash flow, keeping it steady and bringing in money. They will control it for you so the debt never gets so far out of hand that it can not be repaid.
Utilities Debt Collection
In summary, a utilities debt collection service can save you a lot of time and money. With the expertise and advice offered, you can concentrate on your business. All of this will be done while increasing cash flow to the company.
First, Federal Credit Control should be your first stop for debt collection. We serve several industries and over 10,000 customers. Contact us here to become a client and let us claim back what is owed.