Depending on the type of customer or client, debt collections can look drastically different. Either can still be frustrating but one type of debt could actually be harmful to the overall business. Consumer-facing business, for instance, is more transactional. Businesses working together, exchanging goods or services, is likely part of a long-term relationship.
Here are three ways business debt collections and consumer debt collections are different.
Business Debt Collections is Between Companies
Consumer collections agencies will attempt to recover debts that are between a business and an individual. Examples of this relationship include utility companies or healthcare companies that have late or non-paying customers. Business debt collections are B2B or between business-to-business. Some examples of these include subscription services (SaaS), freelancers, creative agencies, consulting companies, manufacturers and suppliers, and more.
FDCPA Doesn't Regulate Business Collections
The Fair Debt Collections Practices Act (FDCPA) limits how consumer collections agencies can contact individuals to collect payments. In general, the legislation doesn't allow a collection agency to stalk, harass or otherwise threaten someone into paying their debt. While a commercial collections agency isn't regulated by the FDCPA, it doesn't mean that these tactics are okay. In fact, the best business-to-business collection agency will help to protect your brand and your business relationships. 
Business Debts Are Larger Sums of Money
All too often, consumer-facing businesses will have to write off the unpaid debts of their customers. These bad debt write-offs mean that the account couldn't be recovered for some reason or another. Business debts can be written off as bad debt too. Business debts, however, are typically much larger sums of money. That means that when a business has to write off an unpaid debt from their clients or business partners, it may affect whether or not they can pay their own debts or other expenses. This also means that it's absolutely worth the cost to hire a professional business-to-business debt collections company to recover what's owed.
So what is the cost to hire a third-party agency to collect business debts? It may be free if the agency is unsuccessful. Otherwise, the cost is a contingency fee of the amount recovered. If you need help getting your clients to pay, Enterprise Recovery can help. Learn more about us by clicking the link below.
