Why do businesses turn to collection agencies to handle their collections? Is it becuase they dont have the time to deal with collections themselves? Is it not that big of a deal and there for they can sell the debt to someone else?Or is it because if there are any illegal practices the business can hide behind the fact that the collection agency was the one collecting?
2007-04-20 07:01:45 · 3 answers · asked by brynrojas 1 in Business & Finance ➔ Credit
Th a couple of reasons. You got the first one right. The company doesn't have the personal to handle this chasing. It takes training on how to chase how to talthe people owing money. The company sells your debt to the collection agency for some small amount, maybe $0.20 on the dollar. For every $100 of debt the company would get $20. The other $80 would be written off in taxes.
The company does not have to worry about the debt again. From then on if the collection agency messes up it is the agencies problem, not the company.
2007-04-20 07:17:04 · answer #1 · answered by ttpawpaw 7 · 0⤊ 0⤋
For the most part, businesses don't have the time or expertise to act as their own collection agency.
2007-04-20 07:07:05 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Different businesses have different policies about collections, but many, especially medical offices, send out normal bills but if you're not immediately responsive, they turn it over to collection. It costs them money to do so, but it's worth it to them because this isn't their core capability.
2007-04-20 07:06:30 · answer #3 · answered by Still reading 6 · 0⤊ 0⤋