Excellent reading. Here is a set of instructions from "professional Collection Advisory" to those OC's contemplating the use of a collection agency. It's at; http://www.crfonline.org/orc/index.html Using An Agency When you turn an account over for collection, make sure you give the agency a complete package. This should include: A statement of all charges. Copies of purchase orders, invoices, proofs of delivery, contracts, etc. [ Oh is that right? The OC is directed to send the CA a copy of "the contract". Why then do they never seem to have it? Lol ] Photocopies of customer's checks for any partial payments. Any correspondence sent or received on any of the outstanding items together with any claims of shortages, non-conforming goods, breakage, or returns. If you have personal or corporate guarantees and/or any security agreements, include copies of these, along with copies of any UCC forms showing the dates filed. The more back-up detail the agency has, the better it can work for you. If the matter has to go to suit, you would have to provide this information anyway, so you might as well do it at the beginning of the process. If any paperwork is missing, it gives you time to locate it. [ "If the matter has to go to suit, you would have to provide this information anyway, so you might as well do it at the beginning of the process". Oh is that right? This is VERY revealing ~ ] Unless there is a good reason for you to become involved (i.e., a return of merchandise or a valid claim which reduces the amount owing, and you issue a credit memo) do not interfere with the process between your customer and the agency. You hired the agency, so let them do their job. Many times a customer will contact you, and try to make a deal so they won't have to pay collection charges or have their reputation tarnished. The customer may also threaten you with a counter-suit because of a product problem or state that if you press the claim, they will never again do business with you. Stand firm, however, if they do threaten suit, let the collection agency and your own legal department know about it. If a customer sends you a check after any free demand period has ended, and it has not gone through a lockbox system so that it is already in your account, send it to the collection agency rather than depositing it. Let the agency determine if any restricted endorsements (i.e. payment in full when it really is not) make the check useless, and require a replacement, or if the check does not clear, let the agency follow up. Before you place a claim with an agency, you should have determined whether you plan to eventually press for suit and judgment if the agency cannot collect amicably. You do not necessarily have to let the agency know of your decision at this stage, but you should have a plan of action in place. If you decide to proceed with a suit, be prepared to pay additional costs, and to wait a long time for a resolution. Some state civil courts have cases backed up months, and sometimes years, and many times a customer will file a petition in Chapter 11, or simply go out of business before your case can be heard. You can expect your customer's attorney to use delaying tactics, and put as many legal roadblocks in your way as possible, to discourage you from proceeding further. Obviously, you have to reserve your decision to sue for those cases where the debt is meaningful. You and your attorney must believe you stand a chance to win, and more importantly, collect on any judgment you might be awarded. While in some instances, placing an account for collection is due to disputes between you and your customer, in most cases it is a strong indicator that your customer has more serious problems than you suspected. These problems may be managerial, operational, or financial--it is probably a bit of each. The undisputed portion must be paid immediately. Any portion of the debt not disputed should be paid; if not, place the account for collection. That's enough for here. But I will say that this one page has a lot more good stuff. ~
