Commercial collections are attempts to recover unpaid business invoices owed to another business. Consumer collections are when a consumer owes a debt to a business.
Because there are dramatic differences between Business-to-Business (B2B) / Commercial collections and Business-to-Consumer (B2C) / Consumer collections, it's important for your business to be matched with the most experienced agency.
Both business parties agree to payment terms, credit, or financing. The Accounts Receivable Department issues an invoice with the expectation that the client's Accounts Payable Department will pay in a timely manner. If payment isn't made, the debt is sent to in-house collections or to an outside collections agency (first vs third party collections) or potentially litigated in court.
Commercial collections are different in these ways:
Business-to-consumer (B2C) relationships are typically transactional, such as shopping at store, or recurring, such as paying utilities. Payments are made at the time of the transaction or the consumer agrees to pay at regular intervals. When the consumer stops payment on the transaction or recurring agreement, the business has the choice to terminate the agreement, reclaim the property, evict a tenant, or hire a consumer collections agency.
Consumer collections are different in these ways:
Both commercial collections and consumer collections agencies may specialize in particular industries. Research will help determine the best fit for your needs.