Collection Terms and Conditions

*We often have clients ask us what they should include in their Terms and Conditions to protect them from a collection standpoint.

Always make sure that you have language in your contract that ensures the delinquent client pay all legal and/or collection fees if not paid within terms.  Is this foolproof?  Not always.  You may get a judge that decides to rule against it, even though it is in the signed contract.  Sometimes the judge will allow interest and court costs, but not attorney fees.  It may vary by courts, but it’s usually the judge’s prerogative to include costs.

One thing for sure, however, is that you will not get paid for any additional costs in court if it is not included in the signed contract.  Never.  Sometimes you’ll get interest, but never legal fees and often not other costs.

*We also have clients who claim they have a signed contract that includes costs, and expect the collection agency to collect these costs without suit.

The collection agency will always attempt to collect as much as possible.  This includes all interest and collection costs, as the agency earns more in fees the more it collects.  The rate is based on anything collected.  However, it is rare to get a delinquent debtor to pay anything additional without suit.  In most cases, it is best to just get the principal amount in the door, then sue for costs of collection only if it is cost effective.  In most cases, the “bird in the hand” approach is best.

Collection agency or collection attorney?

Collection agency or collection attorney?

Both are options, which is right for you?

  • A collection agency specializes in debt collection. They have the resources needed to find debtors and collect on past due receivables.  Rates are lower than an attorney.
  • Attorney fees are generally higher and many are less specialized. A letter from an attorney can often have more of an impact on the debtor, however.

Most creditors choose to use an agency first.  Then, if the agency isn’t successful, but it still looks collectable, the agency has a network of commercial collection attorneys to file a claim against the debtor right there in the debtor’s home courthouse.  The various  debt collection tools and legal expertise at the disposal of the collection agencies together with the comparatively low fees make them an ideal first choice for following up unpaid debts.

Robert Holt to represent IACC at NACM

Once again this year, Robert Holt, President of BCCS, will attend the National Association of Credit Management conference in Dallas June 9-13, 2012.  Mr. Holt will help represent the International Association of Commercial Collections in the Expo booth at the conference.  It is the 18th NACM conference for Mr. Holt, and the 6th time he has helped out in the IACC booth.  If you’re attending the conference, please stop by!

Collecting Disputes

Often in the course of trying to collect on a debt you will come across a debtor with a dispute.  Sometimes it is legitimate, sometimes not.  If you can resolve, that’s great.  Perhaps the dispute is minor – a product missing or one small part of a service not completed.  Easily fixed.  Often the collection agency can get to the root of an issue, or you can resolve in your a/r department.

But sometimes disputes are real hindrances to getting paid.  There may be a major flaw in the work performed, or a key item was not delivered on time to fill your debtor’s order to his customer.  In these instances, chances are it won’t be resolved in-house.  The debtor is firm, and won’t budge.  A third-party collection agency can negotiate a proper settlement, and get you as much as possible, because we work on contingency.  We can get signed agreements, which include default language.  If they don’t pay, we can go right into court to get a default judgment.

However, there are some cases when even the collection agency can’t collect.  The only solution is through the court system.  We have commercial collection attorneys nationally and internationally.  We can put an attorney right in the debtor’s location to sue on your behalf.  They tend to be more responsive when it involves legal action right in their neighborhood.  Plus, there is never an hourly rate.  You pay only contingency, plus court costs for that jurisdiction.

Let us know how we can help.

Collections as Customer Service

I recently gave a Webinar for companies that assist pharmaceutical companies with clinical drug trials.  Many of these companies have unique contracts that call for quarterly or “threshold” payments.  They have to wait until the end of the quarter to get paid, or until a certain thresholds have been reached.  These companies are often much smaller than their clients, and cash flow has to be watched very carefully as payments are often sporadic.

Sometimes the a/p person doesn’t have the necessary approvals to pay.  The Contract Administrator who can certify is on 6-week Medical Leave.  Then, once approved, the client only runs checks once a month, and you just missed the cut-off.

Does this sound like your company’s situation?  What can you do about it?  The one thing I stressed during the Webinar was to proactively handle a/r as a Customer Service task.  Don’t wait until 45 days after the payment is due to make a call.  Start the process before the end of the quarter.  Better yet, be in regular contact, but make it a Customer Service Call.  “Is everything OK?”  “Did you get the services you expected?”  “What can I do to help?”  It is in your best interest to preemptively remove any potential hurdles to payment, so when the time comes, everything is ready and you can get paid on time.

Why Business Collection Experience Matters

If you’re looking to collect the money you’ve earned, you should call someone that has the experience and track record for business collections.   Robert Holt of BCCS has over 25 years of experience in credit and collections management.  He has worked with hundreds of collection cases and has a proven process and track record of getting business collection results.

The March 2012 RxTi Webinar Series

Tracking your receivables, staying on top of late-paying clients, and establishing and communicating collection practices

About: RxTi (producers of the Site Solutions Summit) present the next webinar in the Good Business Practices (GBP) series. The first step in reducing late-paying customers is to establish, communicate, and agree on your payment schedule. Take control of your balance sheet, and help improve your collections efforts with a thought-out plan and improved billing communication.

Invite: Your colleagues – registration fees are the same for individuals or entire team participation at the the same location

Tracking your receivables, staying on top of late-paying clients, and establishing and communicating collection practices.

March 13 (12pm EST)

Speaker: Robert Holt, President, Baltimore Credit and Collection Services, Inc.

Learning Objectives:

* Why cash flow is important, and why everything is different in drug trials
* How to set up an Accounts Receivable/Customer Service department
* How to use CRM software to handle and track everything
* How to keep cash moving through your site


SUBSCRIBE: Search RxTi’s upcoming webinar topics, and gain access to both live and archived GBP and GCP webinars. SUBSCRIBE HERE

Contact: Anna Pens at or 410-465-2455 x 107.

Follow RxTi @RxTiNOW

BCCS President Robert Holt to Make Webinar Presentation

As part of the RxTi Webinar Series – Good Business Practices – BCCS President Robert Holt will present “Tracking Your Receivables, Staying On Top Of Late-Paying Clients And Establishing And Communicating Collection Practices” on March 13, 2012 at Noon. Learn more

Why use a Professional Business Debt Collection Agency?

You’re not getting paid. Some of your customers just don’t have good cash flow. They have a fixed pile of money to pay creditors, and if you’re not the bank or power company or landlord, you end up being grouped in the “later” category. If your not an urgent supplier, you get moved to the “much later” category.

But why should you wait? You’re not the bank, but you’re being asked by your debtor to act like a bank and in essence provide a short-term loan to them. You don’t want to treat your own suppliers like your debtor is treating you, do you? You’ve established credit for your company, and yet your customer is jeopardizing your credit rating because they won’t pay you.This is where the professional Business Debt Collection Agency steps in. We know how this system operates, and we know the games that debtors play. A letter from a Collection Agency carries a lot more weight than one from the creditor. Plus, we send it via US Mail, fax and e-mail, so they get hit from multiple directions at once.

We report their credit as needed. If they’re concerned about their own company credit report, they will pay the agency that reports, first, to keep their name clear.

Lastly, we have a network of Commercial Collection Attorneys. Not just Nationwide, but throughout the world. If we’re still not successful, but it still might be collectible, we can put an attorney who specializes in collecting commercial debt right in the debtors back yard. It shows you mean business, and that you’re not letting this debt go away.

Contact us for more details.

Robert Holt,
President, BCCS

“We help you get more of the money you’ve earned”

When should we send an account for collection?

We get this is a question a lot. Every company must balance the likelihood of collection internally vs reduced profits of sending the account to a third party collection agency. You don’t want to send it too early, because you’d rather get the entire amount and you should be able to collect it yourself. However, you don’t want to wait too long, as the chance of collection, even with an outside agency, diminishes over time. Sometimes by a lot. The balance is not just full invoice vs reduced profit. You have to factor in the third scenario: no collection at all.

The Commercial Collection Agency Association of the Commercial Law League of America published a study in 2004 (before the recent crash – it’s probably worse now) on the Collectability of Delinquent Commercial Debts At Time Intervals After The Due Date. If you wait six months, the chances of collection are only about 50%. A year: around 20%.

We always suggest that you submit accounts when they hit 90-120 days form invoice date. Most of our clients shoot for this. In some cases, even sooner (disputes, reports of debtor financial problems, etc.). If you wait much longer, you severely reduce the likelihood of collection. Can your company afford to wait?

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Contact Information

Baltimore Credit &
Collection Services, Inc.
6400 Baltimore National Pike, #469
Baltimore, MD 21228-3915
Phone: 410-549-6444
Fax: 410-549-3366