Are Business-To-Business Collections Different from Collections Involving Individuals? 

By  //  May 14, 2021

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No one wants their debts to go into a collection process. However, when a collection company takes over a company’s obligations, it hurts the individual, the company, the clients, standing in the community, and credit history.

In addition, the collection process is different for a private individual than it is for business-to-business debts. 

One business trying to collect from another company that has not paid for products and services rendered leaves little for the business owner to do but place the debt into the hands of a professional debt collector. 

The big question is, how does a business owner find the right collection agency or debt collector who can do the job right. Not being paid for services or products sold is stressful, confusing, and complicated enough, in addition to finding someone or some company to collect on a bad debt. 

A business owner has two choices: to contract a debt collection agency or a commercial debt collector. However, even this choice adds stress because there is a difference between these two types of collectors. The business owner needs their money collected in the most efficient manner possible. 

Private Citizens Who Owe a Debt to a Company

A consumer debt collection agency’s specialty is collecting debts owed by an individual consumer to a business. An individual consumer may accrue debts in different areas such as,

■ Personal credit card debt

■ Medical debt

■ Mortgages

■ Personal loans

■ Retail credit

There are federal laws in place to protect a consumer from debt collection practices. This law comes under the Fair Debt Collection Practices Act and protects the individual from any debt collection agency using unfair, aggressive, and unethical practices by these agencies to get the individual to pay. Collection agencies cannot show,

■ Harassment

■ Threatening behavior

■ Deception

If an individual owes an unpaid debt to a company, that company contacts the consumer by sending out a statement or notice of intent to collect. Additionally, agencies can make contact by telephone or emails,

Commercial Debt Collection

Some debt collectors do not collect from individual consumers. Instead, these debt collectors, known as commercial collection agencies, are collecting debts owed by one business to another, known as B2B debt. For example, companies may order goods from a supplier and never pay for what was received. These collection agencies handle all sized companies over a wide range of industries. 

Commercial debt collection agencies are not dictated under the Fair Debt Collection Practices Act, like collection agencies handling individualized overdue accounts. However, these agencies must follow different regulations under separate legislation. Legislation laws still protect companies from,

■ Harassment

■ Aggressive treatment

■ Unethical tactics

Commercial collectors prove to be more flexible to companies far more than collection companies are to the individual. Collection agencies locate the company’s assigned and designated person by telephone who pays the bills and makes regular calls to them to try to work out the best payment options available. These commercial collection agencies work hard to calculate the best payment option and agree to the repayment plan.

Business owners must choose a collection agency whose expertise collects the type of debt that the company needs help with. In contrast, some collection agencies collect from individual consumers and business to business situations. For example, a company trying to collect on overdue accounts has more success in getting their money when hiring a commercial collection agency whose expertise is debts involving one company to another. 

The debt collectors working with individual citizens or for one company to another company are highly trained. These debt collectors need to know the laws of collection practices and abide by them because if they harass, use unethical practices, or threaten the debtor, there are heavy fines and opens the door for lawsuits against the collection company. 

Commercial collection agencies and individual collection agents realize increased success in collecting debts when they work with the debtor and show flexibility in repayment plans. 

B2B Collections Lawyer

Many companies of all sizes who have difficulty collecting overdue accounts may hire a collection’s lawyer to collect unpaid debts from another company. Unfortunately, all it takes is one client to neglect to pay their bill to cause your company financial stress, especially if your company is trying to collect thousands of dollars. In addition, business owners have accounts to meet, such as payroll and vendors. 

Business owners are sure to run into situations where collecting from another company is a challenge and can involve different reasons such as goods or services, not quality or cash flow issues. A company can hire a commercial collection agency or consider hiring a collection attorney. 

■ An attorney brings quicker results and can help salvage the relationship between both companies. 

■ An attorney can help recover the business relationship between both companies. This attorney preserves and restores relationships though showing a high element of professionalism civilly so that the two businesses can work together in the future.

■ A collection attorney can delicately handle the collection process.

■ A collection attorney seasoned and experienced brings faster recovery of overdue accounts that are several thousands of dollars.

■ A seasoned collection attorney does not want to go to court because it is costly and time-consuming. Thus, this attorney works hard to resolve the dispute through fair negotiations.

A Call to Action to Collect Long Overdue Accounts

Make sure to call an attorney for collection assistance as they are eager to explain to the business owner the steps, they can take to get them their money owed through expert communication and negotiations. 

A business owner has a company to run and does not have the time or expertise to collect overdue accounts. Yet, it is vital to a company to have clients pay their bills on time. You will want to have a Houston Business Debt Collection Attorney on your side.