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Strategies for Collecting Overdue Payments in Raw Materials Export

When exporting raw materials, it is crucial for companies to have effective strategies in place for collecting overdue payments. In this article, we will explore a Recovery System for Company Funds and Rates for Collection Services tailored specifically for raw materials exports.

Key Takeaways

  • Implement a 3-phase Recovery System to recover company funds efficiently and effectively.
  • Consider the two recommendations provided in Phase Three for cases where recovery may not be likely.
  • Understand the rates for collection services based on the number of claims submitted and the age and amount of the accounts.
  • Phase One involves initial contact with debtors and skip-tracing, while Phase Two escalates to involving affiliated attorneys for legal action if necessary.
  • Rates for 1 through 9 claims differ from rates for 10 or more claims, with varying percentages based on account age and amount.

Recovery System for Company Funds

Phase One

Initiating the recovery process is critical for the timely collection of overdue payments. Within 24 hours of account placement, our system kicks into gear with a multi-faceted approach:

  • The dispatch of the first of four letters to the debtor via US Mail.
  • Comprehensive skip-tracing and investigation to secure optimal financial and contact data on the debtors.
  • Persistent outreach by our collectors, employing phone calls, emails, text messages, faxes, and more to negotiate a resolution.

Daily attempts are made to engage with the debtors during the initial 30 to 60 days. This aggressive yet professional pursuit is designed to yield results swiftly. If these efforts do not culminate in a resolution, the case escalates to Phase Two, where it is immediately forwarded to an affiliated attorney within the debtor’s jurisdiction.

Phase Two

Upon escalation to Phase Two, the case is transferred to a local attorney within our network, initiating a more formal approach to debt recovery. The attorney’s actions include:

  • Drafting and sending a series of authoritative letters on law firm letterhead.
  • Persistent attempts to contact the debtor through phone calls.

This phase intensifies the pressure on the debtor, signaling the seriousness of the situation.

If these measures do not yield results, a detailed report will be provided, outlining the challenges encountered and suggesting viable next steps. The goal is to achieve a resolution before proceeding to the more consequential Phase Three.

Phase Three

Upon reaching Phase Three, the path forward becomes clear. If the likelihood of recovery is low after a detailed assessment, we advise case closure, incurring no cost to you. Conversely, should litigation be the recommended route, a decision is required.

  • If you opt out of legal action, you may withdraw the claim at no charge, or allow continued pursuit through standard collection methods.
  • Choosing to litigate necessitates upfront legal fees, typically between $600 to $700, based on the debtor’s location.

Upon initiating legal proceedings, our affiliated attorney will aggressively seek recovery of all owed funds, including filing costs. Failure to collect post-litigation results in case closure, absolving you of further financial obligation to our firm or attorney.

The decision to litigate is pivotal, with upfront costs balanced against the potential for full debt recovery. It’s a calculated risk, with the assurance of no additional fees should collection efforts ultimately prove unsuccessful.

Rates for Collection Services

Rates for 1 through 9 claims

When dealing with a smaller volume of claims, the rates for collection services are structured to accommodate the intensity of the recovery process. For accounts less than a year old, a fee of 30% of the amount collected is standard. This rate reflects the relative freshness of the debt and the higher likelihood of successful recovery.

For older accounts, those over a year, the rate increases to 40% due to the additional challenges that come with time. Smaller debts, specifically those under $1000, and accounts requiring legal intervention are both subject to a 50% fee. This is indicative of the extra resources and efforts often necessary in these scenarios.

The fee structure is designed to be proportional to the effort and resources invested in the recovery process, ensuring that clients only pay for the value received.

Here’s a quick breakdown of the rates:

  • Accounts under 1 year: 30%
  • Accounts over 1 year: 40%
  • Accounts under $1000: 50%
  • Accounts with legal action: 50%

It’s essential to note that these rates are competitive and tailored to the specifics of each claim, ensuring a fair approach to the recovery of your company’s funds.

Rates for 10 or more claims

When handling a higher volume of claims, economies of scale come into play. Bulk submissions result in reduced rates, ensuring that your pursuit of overdue payments remains cost-effective. For clients with 10 or more claims, we offer a structured discount system:

  • Accounts under 1 year in age: 27% of the amount collected.
  • Accounts over 1 year in age: 35% of the amount collected.
  • Accounts under $1000.00: 40% of the amount collected.
  • Accounts placed with an attorney: 50% of the amount collected.

These rates are designed to incentivize early and bulk action, maximizing your recovery while minimizing expenses. It’s a strategic approach to debt collection that aligns with your financial interests.

The key to successful collections is a balance between persistent action and cost management. Our tiered pricing for larger claim volumes reflects this principle.

Frequently Asked Questions

What is the Recovery System for Company Funds?

The Recovery System for Company Funds consists of three phases: Phase One involves sending letters, skip-tracing debtors, and attempting to contact them for resolution. Phase Two includes forwarding the case to an attorney for legal action if necessary. Phase Three involves recommending closure of the case or proceeding with litigation, with associated costs explained in detail.

What are the rates for collection services based on the number of claims?

For 1 through 9 claims, rates range from 30% to 50% depending on the age and amount of the account. For 10 or more claims, rates range from 27% to 50% based on the same criteria.

What happens if the possibility of recovery is not likely in Phase Three?

If recovery is not likely, the case may be recommended for closure with no fees owed. Alternatively, litigation may be recommended, requiring upfront legal costs. If litigation fails, no fees are owed.

What actions are taken in Phase One of the Recovery System?

Phase One involves sending letters to debtors, skip-tracing, contacting debtors for resolution, and daily attempts to resolve the account. If unsuccessful, the case progresses to Phase Two.

What occurs in Phase Two of the Recovery System?

Phase Two involves forwarding the case to a local attorney who sends demand letters and attempts to contact the debtor. If all attempts fail, recommendations for further action are provided.

What are the costs associated with proceeding with legal action in Phase Three?

If legal action is chosen in Phase Three, upfront legal costs such as court fees are required. These costs typically range from $600.00 to $700.00 depending on the debtor’s jurisdiction.


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