Unless you have all your clients pay their balance in full at the time of service, you’re likely to end up having far too many outstanding debts. You may then have to decide if you want to form your own collection department — and carefully navigate debt collection laws — or hire a potentially costly debt collection agency. But did you know that you can find a collections attorney instead? With that move, your attorney can quickly collect the money owed to your firm, so you can focus on growing your business. Not sure if you want to take this step? Here are five signs that you need a Florida collections attorney.
Florida Collections Attorney for Outstanding Debts
As the outstanding debts pile up, the unpaid bills take away from your ability to put funds back into your business. At best, your company growth might stagnate, letting your competition zip ahead and become leaders in your industry. At worst, your company could go under due to the lack of money for payroll, inventory, and overhead as a whole.
So, to keep your business afloat for the long term, it’s important to settle the outstanding debts before the missing funds impact your operations. To do that, you need legally-sound collection processes in action from the start. Otherwise, you’ll have to tap into your resources to play catchup and get your company on stable financial ground once again.
Too Much Time Spent on Collection Activities
Collecting consumer debts owed by individuals and commercial debts owed by businesses takes a whole lot of time and manpower, especially if you first have to track down the individual who owes the debt. To dedicate enough time to this process, you’ll either need to take employees off their regular tasks to handle the debt collections or create a whole department.
Either way, when collecting consumer debts you must properly train all your employees to follow the Fair Debt Collection Practices Act, or FDCPA, to stay on the right side of the law. Then, you have to provide adequate oversight to ensure everyone is following the guidelines as written. Otherwise, you can end up in serious legal trouble.
Collection Agencies vs. a Florida Collections Attorney
If you pass off the job to debt collection agencies, you can expect to pay a big portion of outstanding balances in monthly fees. For each debt they collect, you can expect to pay 20% to 50% of the balance. If the account is too old or challenging, then you can expect to pay much more. Their fees can really eat into your revenues as a result.
Beyond that, debt collection agencies are only able to reach out to the person who owes the debt and demand they pay their balance in full. If that doesn’t work, debt collection agencies return the account to you without collecting the monies due. Debt collection agencies do not have the ability to file a lawsuit to bring the debtor into court to collect the money due. A Florida collections attorney can take the next step by filing suit if initial attempts at collection do not work.
Want to Establish a Professional Buffer
When you attempt to collect on a debt or have a collection agency do so on your behalf, it has the potential to damage your client relationships. Your clients may then get offended and take their business elsewhere while spreading their discontent through the community.
By hiring a Florida collections attorney to handle all your past-due accounts from the start, you’re able to create a reasonable buffer. Your clients are more likely to understand that this step is just a part of your normal business operations, not a slight against them. As a result, your customers are more likely to pay their outstanding balances and continue using your services.
Need to Sue Clients to Collect Debts
If you need to sue certain clients to collect the outstanding debts, you have to hire a Florida collections attorney anyway. So, why not have them handle the account from the beginning? They can potentially keep you out of court by simply requesting payment using their reputation in the legal field.
If that doesn’t work out, then they are already familiar with the account and can start the civil lawsuit paperwork right away. You can skip any delay and immediately proceed with the debt collection process with ease.