An In-house Collection Agency

by Jemmer Pablo
(Santa Clara, CA)

We are in the publishing industry and we have advertisers which basically does not pay and have become dead accounts for years. We then hired one of the local companies to do the collection, but were frustrated with the result. We found out that they were harassing our customers and were not kind enough to even get a response from them. We went with another company and the same situation happened.

Finally, our financial consultant recommended a scheme wherein a reduction up to 50% of their total due amount can be paid to eradicate their bad debts from us and they can also pay through a barter scheme where they can use either their products or services as payment. At the end, we were able to close 98% of all the bad debts which is a lot better than nothing!

Reducing the total debt to 50 percent was a bit of a battle between the board but as we've reviewed the performance of bad debts, it was still more logical to follow this idea.

It was not easy though. Getting the attention of our clients who became wary of us with the past collection agencies was quite a task. Our in-house collection team has to go and visit these clients personally in order to make a deal but at the end, it paid to be patient with them.