Does anyone have a policy, or guidelines, on how small an account to send for legal or collections action? We send accounts of all sizes, but tend to send the larger only to Legal, and the smaller ones only to a third-party collection company. Very small ones don't even, I suspect, get more than one call, if that.
In the same vein, is there a particular breakpoint in size that determines whether you send an account to Legal or Collections?
Thanks in advance.
Here's a rough approximation of what we do - if it's real small we write it off because it's not worth spending time/paperwork on. If it's a couple hundred to 20k we place it for collections, and usually won't consider suit fees on anything under 10k because even a judgment is never a guarantee of payment and likely results in more costs to collect. If it's 25k or more we usually place it directly with an attorney ourselves. That being said, we only place a handful of accounts annually with either an agency or attorney so this may not be the norm.
I think it is essential to know how small an account your third party collection agency will handle... and this is a question I always ask when evaluating a collection agency.
Does anyone know CMA's policy relating to the size of accounts one can place with them for collection?
MCD
Thanks for the responses.
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