Why Hire A Collections Agency?

When you find yourself with symptoms of an illness—sweating, shivering, pain, sapped of energy, an inability to keep down food, etc.—you wouldn’t try to solve the problem by simply taking a pain reliever and eating some chicken noodle soup, would you? Of course not. Whether it’s a medical or a financial problem that has you outside your scope of knowledge, there’s no excuse for trying to be your own doctor.

For a physical sickness, you should leave the diagnosis and treatment to a professional physician. Doctors don’t aim to just bandage or mask the pain; they are trained to solve problems at the root.

The same goes for financial situations. When you struggle to collect outstanding debts, you are putting a bandage over an issue that needs professional treatment. When accounts become overdue by 90 or 120 days, there is clearly a problem with the collections process. An experienced debt recovery agency can diagnose the problems in your collections process and offer a solution for your outstanding debt.

“We see the same situation acted out far too many times in the receivables of potential clients of ours,” says Jared Schiff, President of Turbo Debt Recovery. “An ailing debt, which has been consistently covered up with countless letters and notices only to remain elusive for months or even years, needs professional help for a lasting solution.”

Turbo Debt Recovery is a trusted debt recovery agency. We have professionals with decades of experience in collecting debts and we know how to collect quickly. Our collectors will use multiple tools to diagnose your problem and prescribe an effective solution—aka, put money back in your pocket.

The typical process of an in-house collections team is to send letters and notices for weeks or months with little to no progress. This is like putting a Band-Aid over a broken ankle. As a better practice, many companies will send their outstanding accounts to a debt collector. At Turbo Debt Recovery, we can help diagnose your internal problems. Just as a physician acts as an extension of your health, we act as an extension of your company to collect your debt in a professional, firm and polite manner.

Not only is this more effective in collecting your debt, but it also requires minimal time and commitment from your resources—getting you back to financial health faster and with less inconvenience.

Three Reasons Why You Should Choose Turbo Debt Recovery

When businesses have outstanding receivables, they often turn to attorneys to sue the debtor, but Turbo Debt Recovery offers a few services that should take place prior to filing suit. With full-service, from start to finish and a sensitive approach, it’s clear why Turbo is the better fit.

We Provide Full-Service Collections

We are a full-service operation, meaning we work and oversee the accounts from soup to nuts. Specifically, we will onboard each client, upload the accounts, and then work the accounts for 60-90 days and hopefully get some traction and results. In the event that we do not have any progress on those accounts, whether it be a promise to pay, adequate communication with the debtor, or making a payment, then we will qualify the account for legal.

Before this, we sniff for assets. We’ll look and see where they’re working, where they bank, what property they own, if they have a mortgage, etc. We’re looking to weigh the debtors’ assets versus liabilities to determine the collectability of the account. In the event we do find some good assets and our client approves suit, we will get that file to our in-house attorney and he starts his process immediately. Hopefully the debtor pays once they find the suit has been filed, before waiting for a judgment.

Attorneys who file complaints and lawsuits can get a judgment, but what’s next? What we’ve found is attorneys that are filing suit for our clients (prior to them partnering in collections with us) aren’t doing the post judgment remedies that need to be done, to liquidate the funds and collect the money. This is something we’re thoroughly trained in.

We Are Judicious with Your Accounts

Other agencies and law firms will file a lawsuit just to file a lawsuit, hoping the debtor will pay. They make one phone call and if the debtor can’t pay in full, an attorney will typically want to file suit. A big question from your end should be, what assets have you found to go after and once you’ve located the asset, what are the chances of collecting on that asset? At Turbo, we get a financial picture so that we’re not wasting time, money and effort on accounts that can’t be liquidated. They don’t investigate the financial picture of the debtor and check for assets. We see this time and time again. Attorneys are wasting time, effort, and your money. Internally at TDR, we will qualify the account.

If we notice they’ve filed bankruptcy, they don’t own any property, we cannot find a common job, etc., then we shy away from filing suit. Attorneys do not search for assets like we do, and this leads to other issues such as lack of payment after a judgment is received.

We Are Cheaper than a Law Firm

We’ve often seen attorneys charge an hourly fee on top of a success fee when filing suits. Clients have come to us after spending hundreds of dollars on [attempting to] obtaining judgment on files that really don’t make sense to sue. The only way we earn money is if we collect money for you. At Turbo it’s simple, if we don’t collect, you don’t pay!

Winning a Judgment Does Not Mean You’ve “Won”

Picture this: an account becomes overdue and your in-house attorney files suit against the debtor. A judgment is awarded in your favor, but the debt still isn’t paid. You call Turbo Debt Recovery and say “we have a judgment, so what do we do now? What’s next?”

We encounter this same situation over and over again. People automatically assume that suing and winning means getting paid. Unfortunately, even if you do sue and are awarded judgment, you aren’t done. Until the debt is collected, you will have spent time and money on what may turn out to be a lost cause. That’s why we implore you to try our unique approach to debt collections.

Our goal is for you to never have to ask the question, “now, how do we collect?” By getting your claims to us before bringing them to suit, we can reduce your costs, increase the number of paid-in-full accounts, and take away stress from your life and business.

Prior to suing, there’s a lot of investigative work that needs to be done. In industry speak, this is called “skip tracing.” We’re not just going to sue an account; that’s time, money, and effort wasted. So, we take the account and sniff it; we look at it. We see what assets are there.

When our internal team of experienced and educated collectors review and skip trace accounts, they look for common assets. We want to know what they have and what we can liquidate into cash to satisfy their debt to you. Any paperwork the debtor filled out when they on boarded with your company could have important details that are helpful to us in these searches.

Next, we start digging past the assets. What do we really know about the debtor? Have they filed bankruptcy? How many other judgments do they have against them? Are they still in business? If it’s a claim against a consumer, is that person working? We want to know what they owe and how likely (even with assets) they are to pay their debt either with or without a judgment. Collections isn’t just about finding assets, it’s about knowing how to use that asset to your advantage, and how to bring the claim to a Paid in Full status.

Now we contact the debtor to start collections. With our customer-centered approach, we can typically collect debts without having to use a judgment. However, if the debtor does not want to pay the amount in full or voluntarily set up a payment arrangement, we’ll often go ahead and file suit.

If the debtor truly has no assets, is unemployed, is on social security, etc., all of these things weigh heavily in our decision making. If we can’t locate any assets and we see the debtor has filed bankruptcy or they’ve been sued more than once in the past couple of years, then more than likely we will advise the client to close the account. There’s not a lot in this case we can do that makes financial sense for a $1500 account. Remember, you can’t squeeze blood from a turnip.

We get a lot of calls from individuals, small and large businesses, medical companies, doctors’ offices and more asking why they’re having a hard time collecting on their judgments. We believe suing is not the first answer, and we have a high success rate at solving your issues on the first call, without a judgment. Our ability to really sniff out an account adds value for our clients because we are being tactical in our decisions which helps you avoid timely and costly suits that get you nowhere. Try the Turbo Debt Recovery difference today.

To Place or Not to Place? How to Know When to Place a Claim for Collection

Knowing what to place and what not to place can be tricky, especially for nervous business-owners looking to get their money back. It is typical in the collections industry for existing, potential, and even new clients to call in around the months of April and May with lists of bad debt and other write-offs made in the past couple months. Unfortunately, some claims placed within collection agencies are nearly impossible to liquidate. If you’re looking to place claims for collection but are unsure of what to place, this blog should give you some insight as to what is and is not likely to be collected.

Oftentimes businesses will place bankruptcy claims, but it is nearly impossible to collect on these. Though it makes sense from the business side why you would want to place this type of write-off, from a collection agency perspective there is little to be done when a debtor has no assets. There’s no way to collect money that just isn’t there. As an agency, we don’t want to provide false hope to our clients when we likely won’t be able to collect payment from their debtors.

On the other hand, disputes and avoidance accounts are two types of claims we want you to send to us. Disputes are most commonly associated with service-industry related industries such as plumbing and others where someone is hired to fix a problem. Typically, these are a low-worry type of claim, as it’s typically just a way for debtors to avoid paying for the service. If they’re bankrupt, that’s a difference case, but if it’s simply just a dispute, send the write-off our way. Avoidance accounts are what we call accounts whose main point of contact stops answering the phone, and when they do, dodges the question and promises prompt payment but doesn’t deliver. In this case, the debtor likely has financial trouble, and it is up to us as collectors to get to the bottom of it and collect payment as quickly as possible.

More serious worry comes from no-answer accounts, when a debtor simply refuses to communicate or is instead “running around” the problem–giving you a new excuse every time you communicate with them as to why they haven’t paid or requesting more time without explanation. If you’re out of in-house options for collection, let us take a stab at helping to fix the problem. Take the pressure off your company and let us find your debtor’s assets.

Even if you’ve had another agency take a look at your write-offs or done it yourself in-house, send them to us and let us see if we can collect the rest of the balance. If you have any accounts unpaid that need collected, it’s worth a shot just to file them through our new client portal. The portal replaces our old spreadsheet model to make filing write-offs even easier for our clients. Give us a call today to see what we can do for you.

What To Expect From Our Agency

Debt recovery can be a difficult and time-consuming task, but at Turbo Debt Recovery we do things differently. The confidence, persistence, and core values of our team mean you get better results in less time than the competitors. These are the five ways our company goes the extra mile for our clients.

 

Liquidity Rate

Liquidity rate is perhaps the single most important aspect of any debt recovery agency. The liquidity rate is determined by the collections rate for the files placed with our office. The first thing to know is that it all has to do with timing. If debts are pursued and collected within 30 days of the account being past due, there is an 80% to 95% chance of recovering the balance in full. At the 90-day mark, the liquidity rate drops slightly to 75%. After 90 days, the chances of full recovery take a nosedive to 20-25%. By this time, consumer debtors could have filed bankruptcy, moved away and become harder to locate, or amassed debts to others. Commercial debtors may have sold or closed their company and may already have collections suits from other companies, pushing your claim to the bottom of their pile.

Knowing when to place accounts can often be a challenge. Setting an internal policy that’s followed can really make a difference. If the majority of your terms are on a “Net 30” time period, and you haven’t received any funds or communication by the 45th day (15 days passed the terms deadline), talk to us. You’d rather have a larger portion of something, than a whole of nothing.

 

Monthly Reporting

We always want our clients to feel connected to our company. This is why we send both a standard monthly report and a customized report for your business. The standard monthly report shows total inventory and how much of that is still open to collect. Your customized report is truly customizable! We can discuss liquidity rates, actions taken for each account, and discuss ways to improve your internal collections processes (more on that below). In addition, we can set up quarterly or biannual reviews to discuss big picture ideas and issues. While other companies may leave accounts open for six months to a year with few actions, little communication, and no results, we aim for transparency so that you know we’re truly doing everything we can for you.

 

Client Coordinator

We believe in person-to-person relationships, which is why our team of highly trained professionals are there for you every step of the way. As soon as you join us, we send a digital Client Services Manual. This document outlines our policies and procedures and answers many frequently asked questions. Additionally, it gives step-by-step instructions and guidance on

uploading accounts, fixing reporting errors, etc. You can use this as a reference, but we don’t stop our client relationship there.

The most important resource we provide to you is a designated coordinator to be your direct point of contact. When you call our offices, you’ll be met with a human voice, not a long list of prompts that take you to answering machines necessitating a long waiting time until a call back. Our employees don’t hide behind computers and emails. Building rapport with our clients (and the debtors) creates honest communications and better results.

 

Quick Results

The quicker you call us, the better chance you have of getting your claims paid quickly—that’s why we’re called TURBO Debt Recovery. Your accounts receive immediate personalized attention. Other companies will use automated calling systems to begin their collections process. Our team completes thorough research before reaching out to the debtor. Our goal is to weigh all the aspects of that debtors’ financial picture and work with them to create a connection that puts your outstanding balance at the top of their financial priority list. This is particularly important for persons who have multiple debts being collected on.

While it may be a victory for other debt collection companies to close an account after a year or year and a half, we demand results in a fraction of that time. In most situations, if a debt is not paid back within 60 to 90 days, it will qualify for legal action. There is no reason to wait on this for six months or a year. Our smaller team will outwork and outperform companies with 75 to 100 employees because we take personal interest in our clients and their debtors to create solutions for everyone.

 

Correcting Internal Processes

They say prevention is the best medicine and we agree. Our company prides itself on our consulting services. We review your in-office collections process to see how it works, what isn’t working, how much debt has been written off in the past, what your current liquidity rate is, and where your system can be improved. This service is available to any company, whether they have sent claims to us or not. The solutions we provide will create rules, procedures, deadlines, and consistency for your accounts receivable and in-house collections staff. Using our proven methods will reduce your number of outstanding debts and help prevent long waits for low rewards. Our goal is to make your bottom line go up!

 

 

We know you have your choice of debt recovery agencies, but we can provide what others can’t. If you want high liquidity rates, quick turnaround, open communication, and a better system for your company, we’re the debt recovery agency for you.

Red Flags and Credit Worthiness

Determining the credit-worthiness of a potential client can be a daunting task, even for seasoned professionals. A brand-new company with few assets might spoil you with glittering generalities and promises of prompt payment, but no assets can turn into aging receivables quicker than you think. Before you extend credit to a new client, it’s best to give them an in-depth review to ensure that your money isn’t getting thrown away.

With unforeseen business issues such as bankruptcy, transfers, sales, or even death, the process of lending money can get a lot messier than anticipated. Because of this, it’s good to prepare for these circumstances and evaluate all potential risks prior to beginning the lending process. While these problems can devastate anyone and any business, there are some warning signs or red flags to look out for that might indicate that a business you’re working with might fall victim.

Know Your Clients

The first thing you’ll want to do when you get a new client is run a few generic tests on them. Check their county court’s website for any records of them being sued. You’ll have access to the total balance sued for, which gives insight to their financial state. Balances of less than two thousand dollars should raise major red flags, as it indicates that they weren’t able to pay back this nominal amount in a timely manner. At the same time, also take caution if you notice very large balances as this might show that the debtor might not have been actively trying to pay the balance.

No matter what the balance is, there’s a reason it hasn’t been paid and it’s probably smart to talk to the potential client and see if there might have been other circumstances interfering with their ability to pay back their creditor. Quick lien searches on the owner won’t give you much insight to a company’s assets, but it will give you a good liabilities picture. If nothing pops up when you search the municipal court or common pleas website for liens, also run a quick search on the business and its principles. Make sure you’re checking a few neighboring counties for the most holistic view.

If you’re looking to get an asset picture on the owner, search for the company’s agent and incorporator on the Secretary of State’s website. Sometimes the incorporator and the owner are the same person, but if not, look at who they are and do some research on them, too. If the company was incorporated within the last six months, this should raise some red flags. If they don’t have a lot of money behind them and they’ve only been open for a few months, make sure you’re really investigating before you loan them anything. If they have a lot of money behind them, then not having a lot of credit shouldn’t be too much of a concern; they should be willing to sign a personal guarantee. Companies open for upwards of ten years are a safe bet; a nice website and positive reviews mean you’re probably lending to someone who’s creditworthy and will pay you back in a timely manner.

Proactive Awareness “Red Flags”

A good way to learn more about their financial responsibility is to call their credit references. Ask the referrer’s specific questions about how often your potential client misses payments, is late on payments, and the current terms they’ve agreed to. It might also be beneficial to ask if they’ve ever disputed a bill and if they have what the nature of it was. Having a previous dispute is not automatically a red flag, however, having several disputes might be cause for concern. Also run a search to see if the business (or business owner) has ever filed for bankruptcy. While you likely won’t see this, it’s a huge red flag that’s worth further investigation if you do.

The best thing that you can do with your current clients to ensure that you collect payment is work with them. As long as both parties are communicating their concerns openly, you shouldn’t have a problem.

Collecting payments can be difficult and often times are unsuccessful if you don’t collect within the 60 days past due, which is why companies like ours exist. Whether you have a difficult client that’s avoiding payment or you are part of a high-volume business that naturally experiences collecting on clients, unpaid balances can quickly become a large issue that puts a damper on your own cash flow. If you’re looking for professional, firm and polite collection assistance, give Turbo Debt Recovery a call today.

Timing & Excuses- Knowing When to Place With TDR

When operating a business, the thought of chasing customers to collect the money your business is owed probably isn’t the first thought on your mind; that is until your receivables start to accrue day by day and month by month. At Turbo Debt Recovery, we’re here to provide solutions to collect your unpaid invoices. Not getting paid for services performed or products sold can severely affect your cash flow. Whether this is a one-time issue or an ongoing occurrence, you need to be aware of how to handle these situations and when it’s time to place your uncollectible debt with our office.

Businesses need to be firm about receiving payments from a customer. Rather than hoping for the best-case scenario, the decision maker at the company needs to act promptly on excuses so they can collect their money.

The Runaround

When business owners or decision makers are trying to decipher between the correct time to place an account with a debt collector versus holding on to it because they think they’ll recover the funds themselves, they need to ask themselves the following; how old is the account and is the debtor going to pay us? Aging receivables will always be a problem. Correcting the issue starts with your internal team reviewing their aging report. What does it look like? Numbers should be getting smaller as each 30-day window passes. The earlier you place an account, the quicker and higher chances of recovering the balance in full.

Now let’s move to the second question; are they going to pay us? If you knew, you’d have your problem solved without us, but chances are, you don’t know. We’re here to uncover the issues, work the accounts appropriately, and get the accounts collected in full.

Below are several examples of what we call the “runaround”:

  • My boss is out of town, but he will be back next week. We’ll be sure to make the payment upon his return.
  • It is my busiest time of the year; I’ll be sure to get you paid when I can get to it.
  • We put the check in the mail.
  • We don’t have the money to pay.

I’ve personally seen the runaround occur too often when these debtors are trying to avoid payment. If they have not stated that they are going to dispute it, this is another way of saying they are not going to pay it.

How To Fix This?

Look into a debt collection agency. See if their objectives align with your own.

I understand the hesitation from the business owner’s perspective about not contacting a debt collection agency. They don’t want to give away a percentage of the payment. If there is a $10,000 invoice, our company could charge about 25% (rate typically lower; this is for example only). The mindset of the business owner is, “I don’t want $7,500, I want the entire $10,000.” Another thought going through the business owner’s head may be, “I’ve collected a debt that was 3+ months old before. Why would I place with TDR?”

My answer is simple: Sure, you may collect some old debts from time to time. But I’d say the odds are heavily against you once an invoice goes unpaid for more than 60 days. Placing accounts with us is supposed to help correct this issue of writing off a lot of bad debt at the end of the year. Overall, after one-quarter of using our services, you should see a difference in your receivables and revenue generated from us.

If you are the business owner, you need to ask yourself the questions below. It is important that you realize that for each day you are not getting paid for your services performed or products sold, the chances of collecting that money decreases rapidly:

  • Less than 30 days (within the normal Net 30) = 90%-95%
  • 30-59 days = 70%-90%
  • 60-89 days = 60%-80%
  • 90-120 days (rapid decline) = 15%-50%

Questions to Ask Yourself

  • Have you received the runaround?
  • Have they been in debt with us before?
  • Are they not returning calls?
  • Is it 15 days past the original terms of the invoice?

Timeframe

If your business sends out a Net 30 invoice, on the 31st day, you should follow-up to get a status on the payment. If you receive the runaround, that’s when you will need to put on your investigative hat. By the 35th day, if they still haven’t given a concrete answer on when the payment is arriving and how it will be paid, you should start talking to us.

If you wait as long as 60 or 90 days, your chances of recovering this debt (liquidity rate) profoundly decline. Between 30-60 days, typically, you have a 70%-90% chance of recovering. If you wait 90-120 days, the percentage drops as low as 15%.

An issue I’ve seen, which has a drastic effect on the liquidity rate is, placing one large annual batch of claims for collections. As described above, if claims are past the 120-day delinquent mark, we likely will not be recovering as much as we can at the 30-60 day mark.

We at Turbo Debt Recovery Group will review your current in-house process. Next, we will discuss ways to improve your process. We will show you ways to detect the “runaround.” Finally, our company will implement an in-house process that is very simple to follow. At this point, our client should start to see a higher return.