Collection Agency vs. Small Claims Court – The Right Choice for Getting Back Dues
Posted: Jun 22, 2018
What should you choose for your business – small claim court or a collection agency? Read this article to know more.
No matter what the scale of your business is or what kind of unit it is, there will always be clients who will not pay your dues. It can kill your revenue and cash flow. And that is why you must take care of it and do something about it as soon as you notice invoice gathering up on your table.
Now there are various options when it comes to collecting dues from customers – you can set up a separate department in your own company, hire an agency or go to small claims court. However, the first option is not a very good one as it can bring in a lot of complication within the office space. Plus, by appointing full time employees, you have to pay them on a monthly basis even when there are no dues or they are being inefficient at their work. Thus, the later two options are smarter choices.
Coming to a debt collection agency, the collectors will listen to your requirements and likewise, approach the debtors. They come with a lot of experience, know all the tactics and methodologies in the market and use their skills to get the accounts receivables. There are many agencies that work with small as well as Fortune 500 companies. They take up national as well as international accounts. But make sure that your collector is patient, has empathy and is ethical. Otherwise, it can get tough for you to communicate with him or her.
On the other hand, small claims court is another way that entrepreneurs opt for. For this, you will have to visit the local small claims court and fill all the paperwork. Then a hearing date will be given to the defendant and you. You will have to be present at the hearing. The method is quite stressful as the date would be given by the court. Plus, there is a lot of paperwork involved.
So, what should be your pick?
Customers generally take both of them seriously. But why get into legal issues when you can get it done by a commercial collection agency? Plus, there are so many things to take care of such as your goodwill and business image, because frankly, direct dealing at the court comes with a lot of risk. The best part about hiring an agency is that they wouldn’t charge you until and unless your accounts are recovered. Give them the responsibility while you use your precious time on managing other departments of your business.
In a small claims court, there is no guarantee that you will win the case; but with an agency, they will make sure that you get part of your claims if it happens to be a reputed and reliable one.
I hope that this article will help you make the right decision. Gear up and consider all the above mentioned factors before choosing what is best for your company.
To know more about business debt collection, kindly keep following the articles and blogs in this series.
Donald is the owner of a collection agency and is a regular blogger on collection agency services. To know more about debt collecting agency, read his articles and blogs.