Have you ever encountered a client who refuses to pay even after you have delivered excellent service? Here’s a fact: even the best staffing or recruiting businesses have nonpaying clients. In short, it’s not you, it’s them.
Some debtors dodge payment because of financial troubles, but some just do because they believe they could get your service for free. No matter the reason, if a client says they won’t pay you, you need to send it immediately over to collections.
Sending over to collections means getting a collections agency involved to be able to collect the debt. It will cost you a fee, but at the end of the day, it’s better than not getting paid at all.
When should you turn over a debtor to collections?
1. If the debtor tells you they don’t want to pay.
If the debtor says they’re not willing to pay you, always assume that they are telling the truth. Professionally speaking, there is no reason for a client to say that they refuse to pay unless they intend to. Hear them out and know their excuse, but honestly, whatever they say after “We’re not paying you” is irrelevant.
Forwarding these clients to collections as soon as possible will not only save time but will also help you avoid the stress of dealing with them.
2. Turnover if the debt is 90 days past due.
90 days past due upon turning over to collections is the standard that most follow because anything longer than that lowers your chance of collecting the debt, especially if the debtor has stopped picking up the phone. Let’s put it simply. If they failed to pay the debt while they were still answering your calls, the chances that you will be able to collect without their response are as good as none.
3. If the debtor fails to deliver on the promised day of payment.
This is a clear sign that your debtor is in the midst of a financial crisis and they prioritized to pay a different vendor instead of you. You may think of granting them another chance but frankly, you are setting an unrealistic expectation on your end and they will keep prioritizing someone else until they end up not responding and you are way past 90 days.
Getting a collections professional involved will pressure your debtor into prioritizing your company. The sooner you turnover, the sooner you will be able to collect your fee.
If you haven’t turned over to collections yet, we’ve included a few important reminders that you should take note of:
- If the debtor tells you that they are not going to pay you but they seek backup documents, it means that they are actively seeking loopholes to avoid payment. Do not send anything and forward them over to a collections expert as soon as possible.
- If the debtor’s attorney reaches out to you, do not engage. Do not also try to reach out to your debtor directly because, chances are, traps are already waiting for you.
- When you are hiring a collections company, consider their expertise as the methods used in the other industries may not be effective for the nature of your business. Look them up and review their qualifications. Remember that the competency of the collections agency may make or break your chances of getting paid.
It is not uncommon for staffing and recruiting companies to encounter nonpaying clients, so if you encounter a client who forwardly says they won’t pay, won’t return your calls after the debt reaches 90 days past due, or promises they will pay but always fail to deliver, then it’s time to call for backup. Remember that the longer you wait, the lesser the chance of your collection is.
One of the many benefits of dealing with Adams, Evens, and Ross is we do not have to learn how to collect your past-due staffing and recruiting debt. Our people are our secret. We are one of the few collection firms large enough to have Staff Attorneys along with Seasoned Collectors, Asset Investigators, and world-class support staff. There is no doubt on why Adams, Evens, and Ross is the only collection firm in the world that is endorsed by 5 funding companies, 14 associations, and 10 recruiting and staffing trade magazines.
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