The business to business (B2B), or commercial collections business is very different from the consumer collections market. With consumer collections, the name of the game is to get the money. With commercial collections, preserving a working relationship is usually just as or more important than the revenue receipt. Further, the laws and rules for B2B collections are different than those on the consumer side of things, though the two often overlap.
Johnson, Morgan & White is located in Boca Raton, Florida, and though we deal with collections internationally, nationally and locally, the mix of business here in Boca Raton is such that it encompasses a wide melting pot of business types and people. We have many local, regional, national and international businesses right here in our back yard.
This has meant that our clientele often has multiple layers of business and so their debtors will often have the same multiplicity. Some of these are chronic late payers while others we’ve only spoken with once. For most people, commercial collections are rarely heard of unless there is a lawsuit and newsworthy aspect to it, perhaps the business is filing for bankruptcy and creditors are clamoring for their payment or the collection goes to lawsuit and sensational aspects make it something to be mentioned on the front page or the 5 o’clock news. Those cases are the rare exception. In reality, most collections never go to court and shouldn’t need to.
In fact, in the B2B collections business, we consider going to court not only a last resort, but an admission of defeat. Unless the debtor has filed for bankruptcy protection, we try to avoid court in order to not only keep costs down, but to keep relationships intact. Court proceedings have a way of destroying personal and business relationships that would otherwise remain were those involved to resolve the issue amicably and professionally.
Add to this the fact that many business debts are intermingled with personal liabilities and credit lines, especially for small business, and consumer credit laws and restrictions come into play. For example, collecting from John Smith & Co is very different from collecting from John Smith, one is a business, the other a person. The rules surrounding commercial collections revolve mainly around libel and similar issues while the rules surrounding personal collections are much more.. well, personal.
The guiding principle for Johnson, Morgan & White and most reputable recovery agencies is to be professional at all times, no matter the length of time that the debt has been outstanding. Crossing the line into harassment, threats, or worse destroys any relationship that could otherwise be kept and degrades the integrity of the person and company committing those acts.
In my personal experience after decades at this, I can attest to the fact that a professional attitude and demeanor wins the day much more often than do threats and attempts at coercion. I can also say that the earlier we are brought into a past due account, the faster and more likely it will be resolved amicably.
Robert Cooper is President of Johnson, Morgan & White, a commercial recovery firm in Boca Raton, Florida. Cooper has more than twenty years experience in the field and has been awarded many honors locally and nationally in recognition of his contributions in business.