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The Step-By-Step of Commercial Collections

  • Written by Sam Eidson

eidson samAlmost ten years into my collection career I was introduced to commercial collections. I was given the opportunity to collect for a postage meter provider and heavy equipment leasing company. The two clients were dedicated to me and I was provided an assistant to help with skip tracing and outbound calls. What I learned from this experience became invaluable. I quickly learned how you approach commercial debt is far different than consumer debt.

Although the FDCPA doesn’t apply to commercial collections, that doesn’t mean you can do whatever you want. In fact it’s the exact opposite. Whether you contact accounts payable, the office manager or owner, each require a unique approach. For example when you make contact with accounts payable you must remember they are not responsible for the debt, in some cases aren’t concerned about potential consequences and may have been directed not to pay the debt for various reasons such as financial hardship or a dispute of charges. When talking to an office manager they may not have the authority to cut a check and would have to communicate with the owner in order to get the invoice paid. Once you’ve determined they are not a decision maker, I recommend focusing your attempts toward the person who can make decisions. Often that person is the owner of the company. If you are able to make contact with the owner, you have to keep in mind they are used to giving orders, not taking them. They need to be treated with the same level of respect you would give to the owner of your company. There may be various reasons why an invoice went unpaid, sometimes the accounts payable department is unorganized and misses due dates or they have been advised to only pay the necessities until receivables come in.

I always went in to the call expecting to get paid. However, getting a first talk off payment can be challenging. Most of the time the company wants an updated invoice prior to releasing payment. Other times you may discuss the debt with someone who doesn’t have the autonomy to make the decision to release payment. I always took the chain of command approach. After sending our initial dunning letter I would call and ask to speak with accounts payable. So long as I’m making contact and talking money, I would allow them to do their job.

If I started to get the runaround I would then approach the personal guarantor or owner. Unfortunately calling the place of business in an attempt to reach the owner is nearly impossible. Employees in almost every company have been trained to screen calls so the owner isn’t caught off guard with unsolicited sales calls. That is where I became creative by using skip tracing tools to find the owners home or cell number. One tool I used was the Accurint People at Work feature which would provide the name and title of each employee within the company. You can search by company name, phone number or Federal Employer Identification Number. Once you find the company you are looking for you can drill down to the President, Owner or C-level associate by name or social (if provided).

As you can imagine, the last place an owner wants to take a business call is from the comfort of their own home. You quickly become top priority and find out why the invoice went unpaid. Some owners don’t even know the bills aren’t being paid. Others explain they are going through financial difficulty and need assistance. If they have personally guaranteed the loan they are legally obligated to pay and their credit can be affected. If the business is affiliated with Dun & Bradstreet, their business credit rating could also be affected.

In some cases the business has dissolved or been acquired. If the business has been dissolved but there isn’t a personal guarantor, the chances of getting payment are slim to none. If the business has been acquired you will need to discuss the details of the sale with ownership. Ask if new ownership purchased assets and liabilities or just assets. If there is collateral involved your client may have rights to the asset. If the collateral holds value find out if there is a Uniform Commercial Code (UCC) lien and try to arrange voluntary repossession.

Commercial collections can be very rewarding with the right approach.


Sam Eidson is the Director of Compliance for Delta Outsource Group, Inc. He also serves on the Board of Directors for the Missouri Collectors Association.