Dealing with collection agencies can be incredibly frustrating. Even the most fastidious consumer or business owner can find themselves behind in payments, so it's important to know how to deal with the people who attempt to collect overdue payments.
An Interview with Kimberly Belken, Accounts Receivable Specialist
In this exclusive LoveToKnow interview, Kimberly Belken of NECO (a division of Global Industries, Inc.) reveals the best way for both consumers and business owners to deal with collection agents and accounts receivable personnel when account payments have fallen behind schedule.
What happens when a person ignores collection attempts?
Generally, if a person doesn't respond to an invoice I'll send them a notice when they are past due anywhere between 10 and 15 days - just as a courtesy reminder, because things happen. At the end of the month I send out statements to the customers and they serve as reminders. I'll mark on the statement if any payments are past due just so it jumps out at them. If it goes into the next month I will give them a call to find out what is going on, to find out from them how we can work on a way to get any problems resolved and to get the statement paid.
Are most accounts receivable and collections people willing to work with customers?
Yes! Most accounts receivable people are willing to accept smaller payments or work out a payment plan because, once it is turned over to collections, they aren't going to get the full amount of money paid by the customer to the collection agency. Some collection agencies take up to 50 percent of what they collect. It is in the company's best interest to get the bill settled with the customer and not send it to the collection agency.
What should someone do if they have a valid problem and are having no success dealing with collection agencies?
They should ask to speak to the collector's boss, the company controller, or if that doesn't work, the Vice President of finance for the company. Companies should be willing to work with you on a payment plan as long as you are faithful with keeping up on the payments or sending some amount of money in. They should work with you on that.
What happens when your company receives a bankruptcy notification on an account?
When I receive a bankruptcy notification I cannot continue to contact that person for any reason regarding the account. We have to wait for the settlement of the bankruptcy to see if the company will get anything out of it.
What is the best way to deal with a company you owe money to when you are faced with unexpected financial difficulties?
Be honest and polite. They want to work with you and keep you as a customer. As long as you are upfront and honest they are going to work with you. Don't tell them the check is in the mail unless it actually is because that will set up bad relations in the future. It's far better to miss a payment entirely while keeping the collector informed rather than send a check to the company that you know will wind up returned for insufficient funds.
What are some differences with collecting from an individual versus collecting from a business?
If you are dealing with the accounts receivable department on behalf of a business, they are not obligated to follow the Fair Debt Collections Practices Act, so they may have different policies about collecting.
Your rights as an individual consumer and as a business owner vary from state to state. The rules to be followed depend on the state in which the consumer and business are located.
When should a person contact accounts receivable to let them know they don't have the money to pay?
You should contact them as soon as you know you can't make the payment. It's always better if you contact them, instead of waiting for them to contact you. When calling regarding accounts for your own business, it's also better to contact the accounts receivable department instead of the sales representative you initially dealt with. The sales representative may not understand what to do with the information and your account may not be updated, resulting in the account still showing up as delinquent.
About Kimberly Belken
Kimberly Belken is an Accounts Receivable Specialist with NECO and is responsible for collections and billing in addition to making credit decisions regarding new and existing accounts. Her professional experience has taught her that a proactive approach to managing delinquent debt is far better than ignoring the problem and avoiding contact with collectors.