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Original Articles

Innovative 3-Phase Approach for Commercial Debt Collections

When it comes to Commercial Debt Collections, Brown & Joseph, Ltd. goes beyond the “status quo” by providing B2B debt collection services through our innovative 3-phase collection process. Our approach greatly reducing the costly judgment enforcement compared to using a typical debt collection agency.

With the implementation of our 3-phase process, Brown & Joseph, Ltd. is able to minimize your litigation costs. Less than 1/10th of 1% of all files placed with Brown & Joseph is forwarded to outside attorneys for litigation.

In this new economy that surrounds business collections (B2B debt collections), companies are experiencing high trends in debt recovery litigation and elevated costs when employing debt collection agencies, as more and more cases are forwarded to outside attorneys for litigation. The rising costs of debt recovery litigation demands a change of tactics and business debt recovery solutions.

A commercial collection agency, Brown & Joseph, Ltd.  has taken the status quo of main stream commercial collections and developed an innovative 3-phase approach that increases recovery percentages, reduces the need for debt recovery litigation, and, the rising costs of litigation normally charged by outside litigation law firms that collection agencies employ.

Our 3-phase approach combines the best of all the practices employed by commercial credit risk analysis companies, commercial collection agencies, and outside debt litigation law firms.

Phase One - Commercial Credit Scoring and Commercial Credit Risk Analysis

Upon receipt of B2B debt collection assignments, all cases placed for collections are credit scored and a commercial credit risk analysis is performed. This business credit intelligence is attached to the debtor information file. This approach provides factual and critical commercial credit risk information, as well as payment pattern trends, which is important for the collection process. 

We obtain factual information about the debtor’s ability to pay and payment trends based on the past six quarters before we start the collection process.

The information we gather contains payment history trends, state and federal tax lien information, pending laws suits, unsatisfied judgments, UCC filings, secured creditors, collection agency action, the legal business owner’s information, trending information showing whether or not the company’s payment trends are increasing or decreasing, and, their current risk factor.

Armed with this information, conversations are based on fact and not misinformation typically provided by debtor companies during the collections process to collections agencies that do not use credit and payment history information.

The benefit is faster payment of debt, higher settlements, and less litigation because we can determine whether or not a company will default during the collection process. It does not make sense to sue a company in financial distress with unsatisfied judgments already recorded.

Knowing this, we will provide you with factual information so you can make the best settlement or litigation decisions when needed.

Phase Two - Segmentation and B2B Debt Collections

Using the commercial credit score and commercial credit risk analysis, files are segmented and prioritized by their predictive payment trend and balance. This segmentation rapidly identifies companies that have the financial resources available for rapid resolution and bad debt recovery. These cases are assigned to our experienced B2B debt collections specialists for the initial phase of collections through Brown & Joseph’s commercial collection agency. Companies with medium to low scores, meaning high credit risk, are placed with our most experienced collectors as these files require a much sterner collection approach.

Files are also segmented by industry and assigned to a collection team with experience in your type of business.

Experience is the key with these difficult cases as the debtors will reallocate their payment priority, pay your debt due and delay payment to other collections agencies or vendors pursuing debt to other companies.

After all, if the debtors owe you money, chances are they also owe others and are being pursued by several collection agencies at the same time.

Phase Three - Debt Recovery Litigation

As a member of the Commercial Collection Agency Association section of  the Commercial Law League of America, Brown & Joseph, Ltd.  maintains a national network of experienced litigation law firms.

When a debt is not paid, litigation is the last step. Our in-house asset department will search for assets the debtor has to determine if litigation is warranted. Once this process is complete, we will forward the information to our client for approval.

The use of this B2B intelligence information and process greatly reduces the amount of non-profitable suits, judgments that cannot be enforced, litigation costs and costly judgment enforcements. With our 3-phase process, Brown & Joseph, Ltd. forwards files to outside attorneys to litigate on less than 1 1/10th of a percent of all files placed for collection.

The Results

The 3-phase approach will increase bad debt collection recovery percentages and reduce back-end legal costs, which results in a positive effect on your bottom-line profits.

Ready to develop a strategy with our commercial collection specialists? Request a consultation now.