Is There a Best Cannabis Debt Collection Agency?
- July 14, 2019
- Posted by: Peter Moran
- Category: Collection Agency, Financial Services
Internal processes for handling debtor accounts vary by industry and even by companies within the Cannabis industry. What works for a mid-size company may not work for small businesses. A technology company in San Diego likely has different practices from a similar company in New York City. With that said, handling credit and collection matters vary as well. So when it comes to commercial Cannabis debt collection agencies, one size does not fit all and don’t just choose by picking straws.
In general, the biggest difference is between traditional agencies and flat fee commercial collection agencies. With some flat fee collection agencies, the debt collection process is an extension of your normal A/R process. Whereas, traditional agencies offer services that are in addition to your process and are often needed when special circumstances arise.
Here are a few items of importance to consider to help you determine if a collection agency is a right fit for your business:
- Commercial Collection Rates – Does the agency charge a percentage of the account balance or do they offer a flat fee debt collection service? In either case, do a cost-benefit analysis to assess how the collection costs will impact your bottom line and the potential ROI.
- Debt Collection Service – Understand what collection methods will most benefit your business needs and go with a collection agency that offers the service that is the best fit. Some businesses will get the results they need by simply having a collection agency send debt collection letters to their customers. On the other hand, some organizations are prone to more complicated collection matters requiring repeated collection calls.
- Account Handling – What additional Cannabis debt collection features are required by your business? For instance, what kind of reporting, if any is needed? How important is access to your accounts through a creditor portal?
- Long-Term Commitments – Some traditional collection agencies and more often, agencies that offer Cannabis debt collections for a fixed fee, require their customers to sign long-term contracts locking them into service for one to two years minimum. Before engaging in such a contract, be sure the agency clearly outlines the terms, including penalties for early cancellation.
As with any other business purchase, when choosing the best commercial Cannabis collection agency to suit your needs, be sure to ask questions upfront and understand the service you will be receiving. You may decide to work with a flat fee collection agency, a traditional agency or a combination of the two. What’s most important is that you utilize a service that best meets your business requirements.