Protect your account receivables and your business a hit if you ever need to use a collection agency by adding some language to your quote, proposal, contract, or estimate that makes the customer responsible for any collection fees that you may incur. As promised in the video below is two different notices you could apply. I prefer the first one because it covers you in case the collection agency ever changes their rates or if you change agencies. I’m not a lawyer, and you should have one review your contracts, legal documents, and the below statements to make sure everything is on the up and up in your area.

Protect your account receivables and your business a hit if you ever need to use a collection agency by adding some language to your quote, proposal, contract, or estimate that makes the customer responsible for any collection fees that you may incur. As promised in the video below is two different notices you could apply. I prefer the first one because it covers you in case the collection agency ever changes their rates or if you change agencies. I’m not a lawyer, and you should have one review your contracts, legal documents, and the below statements to make sure everything is on the up and up in your area.

Sample Language To Protect Your Account Receivables

In the event that a past due account is assigned to a collection agency, you agree to pay all reasonable costs for the collection agency. If legal action is required, then you also agree to pay all court costs and any reasonable attorney fees.

In the event that a past due account is assigned to a collection agency, you agree to pay the cost of collection on accounts without legal action of 30% of the principal balance. The costs of collection on accounts requiring legal action, a 40% fee of the principal balance. In addition, you agree to pay all court costs and reasonable attorney fees.

Two Additional Tips To Prevent Write-Offs

  1. Don’t wait too long to send an account to a collection agency. The sooner you send it to a collection agency, the better your odds will be at recovering your money.
  2. Protect your account receivables by requiring autopay with a credit card or ACH. If you offer recurring services, start charging your clients immediately. Then when the service is complete, you get paid and don’t need to wait until the end of the month.

Any Recommendations?

If you have worked with a collection agency in the past and liked them, please share their information in the comments. Unfortunately, the company we use to recommend doesn’t communicate well any longer; therefore, we don’t have any recommendations right now.

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