Debt Collection Services & Receivable Management
Better cash flow. Less write-off's. More cash in your pocket.
It’s how companies and credit teams maximize their recovery results and up their collection game.
“You truly feel like an extension of our team, and we especially appreciate the professionalism you portray with us and our members.”
-Darryl Hovanak, Spark Credit Union
As the person responsible for maintaining a steady accounts receivable for your company, you know:
Cash flow is the lifeblood of all businesses. Responsible management of your receivables can be the difference between staying solvent and profitable or joining the list of companies in receivership.
The most common struggles internal credit staff experience is knowing how to make an effective collection call, and when to retain the services of a third-party debt collection agency.
The debt collection services offered by Priority Credit Management Corporation (PCM Corp) would allow your staff to implement a consistent customer contact strategy throughout the credit sales cycle. This system increases the likelihood of payment.
How Much Does a Debt Collection Agency Charge?
Companies usually charge a contingency fee (no collection no charge) for debt collection services, based on a percentage of the amount that is paid. There are other compensation models to consider if your client is still in the very early stages of delinquency. Generally, you should be able to negotiate a lower fee if the debt is under 150 days past due. If the debt is over one year past due, then you can expect to pay up to 50%.
A debt collection firm should report your customer to the appropriate credit bureaus as part of their service offering, usually at no charge to the Creditor.
Should your customer dispute the debt or simply refuse to pay, but has no means to do so, then legal action should be considered. At PCM Corp, we only litigate about 3% of the claims assigned for collection. The other 97% are either collected or closed out as uncollectable.
Your debt collector should only recommend litigation if, in their opinion, legal action will result in prompt payment. The collection agency should always support its recommendation to sue with a clear strategy for post-judgment execution; otherwise, you are likely throwing good money at bad money.
Not all claims can be collected. The probability of recovery is directly proportional to the credit quality of the debtor. If the debt collection services report the closure of your account, they have made a decision based upon factors such as debtor assets, cash flow, debt load, and size of the debt.
In these cases, the agency will provide you with a close-out letter. You can still take your customer to court if you wish, and the agency will not expect a payment, but the probability of recovery is likely close to nil.
How Long Does It Take To Recover My Debt?
Some claims are paid the same day PCM Corp communicates with your customer, and some never pay. Again the chances of recovery become poorer the longer you wait to take action.
Why Priority Credit Management Corp. vs. Another Debt Collection Agency?
All debt collection firms have access to the same technology and computer hardware. The sole differentiator is people. At PCM Corp, we make significant investments in hiring, training, and providing ongoing professional development to our staff. Employees of PCM have been carefully screened to ensure a great cultural fit. As you can imagine, debt collection isn’t always easy. Working with a great team all day long ensures we perform at our best, finding innovative ways to do the work and provide our clients with a highly satisfactory experience.
About Priority Credit Management
PCM Corp provides the tools and support that creditors need to responsibly manage their receivables and improve cash flow. We are here when you need us, to ensure the ongoing financial health of your business.
“Some companies simply can not solve their issues and file for credit protection or few are simply bad actors who refuse to pay their bills. For such circumstances we required experts to assist us with collections. The company we used previously only provided collection services and unfortunately not very successfully. [PCM] was able to recover cost for us in less than a week where we tried over 12 months.”
-Nasser Ahmed, Multi Glass Insulation
“Adtel has seen a substantial gain on the recovery rates of accounts that have been sent to PCM for collection.”
-Jodie Sinclair, Adtel
“When working at a previous job, we used PCM for collections. I liked the promptness of the service and the updates. Moving to other jobs through out the years I have recommended PCM. No pausing was required [when choosing PCM]. Past experience with other companies I have worked with no matter the size/volume of company the service is the same.
There is relief at knowing that PCM will look into every avenue to resolve the collection process. Your staff have the legal knowledge I do not.
Knowing that once I have filed docs with PCM, they will be taken care of and not just set aside. Also, PCM is helping me develop a better understanding of the collection process from your end of things. The learning process never ends! Even when I am 60+!”
-Jan Stuart, Can Cell
How Does The PCM Debt Collection Process Work?
Out debt collection process is very visceral—every situation has different factors and outcomes vary. We always encourage business owners and credit managers to reach out and meet our team. It is vital for our staff to understand your business and customer base thoroughly.
Debt Collection Services Outline – How We Manage Early-Stage Delinquency
- We Interview You – Slow-paying customers can be the result of a communication problem and not necessarily a cash flow problem. By reviewing your customer’s history, we can get a clear picture of the entire situation. Our neutral, objective review can sometimes uncover issues that may be easily fixed. In many cases, a simple negotiation leads to payment and more often than not, another order for your sales team. After the interview, we will make recommendations internally or referrals to a more suitable professional.
- Identify Credit Quality Concerns – If we feel this is a situation that requires escalation, we will usually encourage you to move quickly. Your customer may be experiencing cash flow issues of their own. In these cases, those creditors who are first to act have a higher probability of getting paid. If left too long, more and more suppliers will be taking collection action and your customer will begin to run out of options.
- Debt Collection – Although every account that flows through our firm is unique and different, a file will typically remain active for a minimum of 90 days. PCM Corp reports to 8 credit bureaus across the country. If we do not see movement on the account, with your permission, we will send a notice to your client on day 30 that we intend to start reporting to the credit bureau. If the debtor is unresponsive, we will start reporting on day 61. Within 90 days, we will either collect, sue, or close the file.
NOTE: We may be able to add the costs of debt collection services into your claim amount depending on the contracts you have in place. A PCM team member will review your contract to verify.
When Should I Send In My Claim to a Professional Debt Collection Agency?
One of the most common reasons credit professionals and business owners cite for not engaging debt collection services earlier is they are afraid the collection experience would jeopardize the relationship. And so, instead of taking action— they wait.
The single biggest risk to your cash flow is time. Unlike wine or cheese, your accounts receivable do not get better with age. Internal debt collection steps can begin as soon as you invoice your customer. There is no law stating that you must wait for your money or that you can’t engage the services of an outsourced professional or third-party debt collection agency to collect your money. Your business needs cash to pay the bills, staff, and buy more raw materials; waiting is not always an option.
Not Every Account Is The Same- Communication Is Key
Communication is the number one characteristic of a successful engagement with a debt collection agency. What is happening with my customer? What is the probability of payment? What steps should I consider? Should I sue my client? These, and many more questions are normal concerns during this period.
A good debt collection firm should have a consistent method of answering these questions in a timely fashion, so you know the status of your cash flow. PCM has developed a client-tested Balanced Scorecard that enables us to provide consistent and reliable debt collection services.
There are three things that a debt collector can do for you: Collect, Sue, or Close your customer. It is the agency’s job to work closely with you to make those decisions.
“They are quick to take action on all accounts I have placed with them with lots of communication of the progress they are making. Their approach has been getting our business results.”-Confidential Financial Institution
“I started work almost 6 years ago with a Petro Canada Bulk fuel agency and on my 2nd day there, Brad Lohner came in to meet with me and he spent 2 days explaining how Priority Credit Recovery operates and we dove right into calling clients who were very delinquent on their accounts, with Brad’s guidance and expertise. The very next day the lady I had spoken with came in with a nice cheque to pay on her account, and my manager couldn’t believe it! We have an excellent rapport with your company, and your advice and assistance in collecting is so appreciated. I still use the letters that Brad gave to me that first day, to send to clients that I cannot get ahold of by phone. Your company has collected funds on accounts we had given up on. You have assisted me with questions regarding various subjects I have not explored before, aiding me with the job. Thank you for all that you do. It’s so nice to know that you are my wonderful “tool” to aide me in my collection efforts.”
-Carolyn Cassady, Bulk Fuel Agency
“There is a fine balancing act when pursuing collections for a Homeowners Associations. The desire is to apply enough pressure that the overdue owners pay, while ensuring that the Association’s relations with the Homeowners remains intact. With the help of PCR Group, Priority Credit & Lien-Pro, we are very pleased to have been able to collect on 84% of the files we send.”
-Michael Robin, The Grange HOA