Suggestions for a good collection agency?

[Boomph]

Hey guys,

Long story short, we own a meat wholesale in Calgary and are left with no other choice but to hire a collection agency to collect the amount owing from a restaurant who had refused to pay us after taking delivery of our products. We usually give businesses a 14-30 day grace period before the amount is due, but the outstanding balance has been overdue for 57 days and counting now. The reason why they are refusing to pay the outstanding balance was because business has been slow for them, but business has been slow for many over the last year. Further, they are requesting us to deliver more meats so they can continue to operate, but at the same time refusing to clear the owing balance.

So if you have dealt with a good collection agency, please forward me some information. it would be highly appreciated!

Thanks

[HondaKid]

A collection agency would take the vast majority of the debt. Can you trade the restaurant for gift certificates, give them to other clients or employes or resell on Beyond. I would think you will get more of a return than hiring a collection agency.

Sometimes the softer stick approach is kinder to your end of the deal.

You cannot extend a business relationship with the restaurant any more, that ship has sailed. A cash, not cheque delivery is welcomed. Call around to their other suppliers and you will find they are in the same boat as your company.

I have no experiences with Calgary agencies, the ones I used were on a sliding scale depending on the value of the collection. In most cases it was a waste of time and money dealing with the whole issue. We went through a list of our current clients and cut 30% of them simply because they were close to or were behind on payments. This allowed us to focus on the good clients, we gave them better service and prices as the deadbeats were not a drain on our business any longer.

Look over your client list, keep the good, toss the bad or move them to a cash deal only.

Good luck.

[Boomph]

Originally posted by HondaKid
A collection agency would take the vast majority of the debt. Can you trade the restaurant for gift certificates, give them to other clients or employes or resell on Beyond. I would think you will get more of a return than hiring a collection agency.

Sometimes the softer stick approach is kinder to your end of the deal.

You cannot extend a business relationship with the restaurant any more, that ship has sailed. A cash, not cheque delivery is welcomed. Call around to their other suppliers and you will find they are in the same boat as your company.

I have no experiences with Calgary agencies, the ones I used were on a sliding scale depending on the value of the collection. In most cases it was a waste of time and money dealing with the whole issue. We went through a list of our current clients and cut 30% of them simply because they were close to or were behind on payments. This allowed us to focus on the good clients, we gave them better service and prices as the deadbeats were not a drain on our business any longer.

Look over your client list, keep the good, toss the bad or move them to a cash deal only.

Good luck.

Hey Thanks for the response. I understand that the agencies would take up much of the fee, but its a matter of principle. They had always been late on clearing up the balance and I have spoke to them many times and even refused to trade for gift certificates. And yups, it has appeared that their other suppliers has already taken the route of hiring an agency to collect the owing balance.

[97'Scort]

^ I don't really know what HondaKid is smoking to tell you to ask for gift certificates.

Anyways, you can't get collections to go after them until you have a court ruling allowing you to go collect from them. As a wholesaler, even a small one, I assume you have access to a lawer in case of an emergency. Get them to write the restaurant a letter threatening legal action. If that doesn't work, then you can take them to court over the amount owed.

If you win the court case, and they STILL won't pay up, then you can get a bailiff to help with collections.

IMO, that's the process to use. Frequently the letter from a lawyer is enough to get them to pay up anyways.

Edit: just saw your other post. If they're in debt to that many suppliers they're probably going to go under. Keep an eye on them in case they file bankruptcy so you can register as a debtor.

[Boomph]

97'Scort: thanks for the advice! It never occurred to me to phone up our lawyer and to issue them a letter.

Thanks!

[UndrgroundRider]

Originally posted by 97'Scort
Anyways, you can't get collections to go after them until you have a court ruling allowing you to go collect from them.

I don't know what this guy is smoking. You can definitely turn this debt over to a collector without going to court. But it would be pointless, all they will do is take half of the debt and place a bunch of phone calls and letters.

There are two ways to affect their credit, one is to become a member of the credit bureau and report the debt, or take them to court and win. Both will show up on their credit report.

Unfortunately, it doesn't matter which way you go, you will probably be wasting your time. This business probably isn't long for this world, and the banks will be paid out with whatever is left long before the vendors see anything.

Here's what I would do. First, I would try and work out a payment plan. It doesn't matter show terrible the terms are, since it's likely the only way you see a cent out of them anyway. Second, stop offering Net15 or Net30 payment terms and require money upfront from now on.

Also keep in mind, an outstanding balance for 57 days isn't world shattering in the credit industry. Most places don't turn things over to collections until its well past 90 days. You might be over reacting a little bit.

[nonlinear]

sue them ASAP before they file bankruptcy.

[97'Scort]

Originally posted by UndrgroundRider
I don't know what this guy is smoking. You can definitely turn this debt over to a collector without going to court. But it would be pointless, all they will do is take half of the debt and place a bunch of phone calls and letters.

Let me put it this way: without a judgement, they're not obliged to pay you anything more than they are right now. What is a collection agency going to do other than make some threatening phone calls you can make yourself?

[UndrgroundRider]

Originally posted by 97'Scort


Let me put it this way: without a judgement, they're not obliged to pay you anything more than they are right now. What is a collection agency going to do other than make some threatening phone calls you can make yourself?

What does that have anything to do with your first statement that he needs a court ruling before sending it to collections?

Dealer: You've got 20!
Peter: Hit me.
Lois: Peter, don't.
Peter: Hit me.
Dealer: 21!
Peter: Hit me.
Lois: Peter.
Peter: Hit me.
Dealer: That's 30
Peter: Hit me.

[HondaKid]

Originally posted by 97'Scort
^ I don't really know what HondaKid is smoking to tell you to ask for gift certificates.

Anyways, you can't get collections to go after them until you have a court ruling allowing you to go collect from them. As a wholesaler, even a small one, I assume you have access to a lawer in case of an emergency. Get them to write the restaurant a letter threatening legal action. If that doesn't work, then you can take them to court over the amount owed.

If you win the court case, and they STILL won't pay up, then you can get a bailiff to help with collections.

IMO, that's the process to use. Frequently the letter from a lawyer is enough to get them to pay up anyways.

Edit: just saw your other post. If they're in debt to that many suppliers they're probably going to go under. Keep an eye on them in case they file bankruptcy so you can register as a debtor.

Going to court, the time and energy is not worth it. Hiring an agency, again the time and effort is simply not worth it. I was offering a quick win-win solution, where both parties can walk away satisfied and get on with their real businesses. The restaurant is going under, it will not see summer, there are too many collections at work.

[max_boost]

Oh that's tough man, sounds like they are probably on the verge of going under.

[jwslam]

Post the name of the place and send the beyond mob after them?

On a serious note, court sounds good. It sounds like you aren't rather worried about the money and want the principles taught.

[Boomph]

Originally posted by jwslam
Post the name of the place and send the beyond mob after them?

On a serious note, court sounds good. It sounds like you aren't rather worried about the money and want the principles taught.

This is exactly what I am after. its a matter of principle. Each time I or my driver drops in and ask for payment the attitudes they give me is rather harsh and disrespectful, yet at the same time they want more products to be rushed delivered.

But thanks for all the advice from the Beyond community. I have contacted both my lawyer for advice and a few local agencies as a potential route to take up.

[G-Suede]

Upper decker for sure.

[TomcoPDR]

Is this an ethnic restaurant? (Chinese, East Indian, etc...)

If so, (and disclaimer, now I'm not telling "you" to do this), but if a food supplier would be in your shoes, they would start spreading rumours about the bad debt and how the owners are deadbeat, about to go under, about to lay off staff, etc...

Sometimes a little trade embarrassment floating within the community is all it needs to get payment flowing.

[swak]

can you disclose the name of the restaurant?

[Boomph]

Originally posted by TomcoPDR
Is this an ethnic restaurant? (Chinese, East Indian, etc...)

If so, (and disclaimer, now I'm not telling "you" to do this), but if a food supplier would be in your shoes, they would start spreading rumours about the bad debt and how the owners are deadbeat, about to go under, about to lay off staff, etc...

Sometimes a little trade embarrassment floating within the community is all it needs to get payment flowing.

I see where you are going with this, but I rather not go that far as publicly embarrass the owner and his restaurant. But yes it is an ethnic origin.

[ddduke]

Originally posted by swak
can you disclose the name of the restaurant?

Why do you care which restaurant it is? I'm sure it doesn't change the qualtiy of the food. It's none of your business if the owners are deadbeats.

[cancer man]

Have you heard about the china town fire ??
No free food for you....

[97'Scort]

Originally posted by UndrgroundRider
What does that have anything to do with your first statement that he needs a court ruling before sending it to collections?

I mis-typed in the first one. However, wasting time and money on a collections agency isn't going to help, because all the collections aspect is going to do is ding their already non-existent credit rating.

If the OP takes it to court, he can PROPERLY collect with a judgement and a bailiff, if necessary, and if the business survives. If the business goes UNDER, they will already be in line to receive part of the money from the sale of the business assets. I don't see any other option for the OP other than a lawyer that makes any kind of sense.

[sillysod]

We have a family business... this is a normal situation.

All you need to do is get a lawyer to draft a letter. 90% of the time when they get the letter they will pay you first.

We send a letter out every 3 - 4 months and in our 35 year history have gone to court 2 times.

Remember they still have to pay bills like enmax etc to keep the doors open so they do have SOME money. You are likely at the bottom of their priority list for payments go so once they pay the high priority ones if there is cash left over they will pay you.

A well worded letter from your lawers office will be a lot less expensive, much faster and more effective than anything else.