Most people are very familiar with tools and heavy equipment. They see jackhammers and backhoes on their drive to work every day. They probably also witness excavators at work in their neighborhoods as people build pools and install trees. But what many people don’t realize is how expensive many of these tools are. They can cost tens of thousands of dollars, and they are often essential to these businesses’ everyday operations. Many small businesses choose to rent this kind of equipment instead of buying it. Unfortunately, these rentals can go unpaid, leaving tool rental companies high and dry.
Types of Outstanding Debt in Tool Rental
There are a few different ways a tool rental bill can go unpaid. Most tool rentals are done on a daily rate, and there may be weekly or monthly rates as well, depending on the length of the project. The rental fee may be collected entirely upfront, or the business may get a line of credit with the rental business. Most lines of credit have payment terms of anywhere from NET 30 to 90 days, with late fees occurring afterward.
Sometimes an individual or business may rent a tool by making a down payment and paying the balance when they return the tool. If the renter doesn’t have the money to make the payment upon return, the rental company will often send a bill. In this situation, sometimes the renter doesn’t return the tool at all because they can’t pay, which could cause the rental company to bill them for the rental fee and the cost of the tool. This can rack up some very serious bills as these tools can cost hundreds or even thousands of dollars.
Challenges of Collecting Tool Rental Debt
Collecting tool rental debt can be challenging for companies to handle in-house. While you likely have a billing department that handles invoices, they are unlikely to have collection experience. Making phone calls and sending off-cycle bills is a very time-consuming and stressful process. This could result in lots of wasted time and turnover in your billing department.
Most of the customers that you deal with as a tool rental company are commercial. This presents its own set of challenges to collecting past due invoices. Often, the decision to pay and the power to do so doesn’t lie with only one person. Even owners may be subject to an outside bookkeeper or billing department. If their payment cycle differs from your billing cycle, it can be hard to sync up and get the bill paid.
There are also different legal considerations to be made with commercial clients. It’s hard to know and follow all these regulations internally when you have many other responsibilities. Breaking laws regarding contact or statutes of limitations can result in you never being able to collect the debt, and you certainly don’t want to forfeit your money.
Advantages of Using Professional Collectors
When you use a professional collection agency, you are choosing the most efficient, practical way to collect your debt. Professional recovery agents are trained in best practices for recovering debt from all kinds of clients, including commercial clients. They are well trained in the laws that protect consumers and businesses like you concerning debt, and they can use that knowledge to get you paid faster. You won’t have to worry about them making any legal or ethical mistakes that will cost you your payment. They are extremely knowledgeable in debt collection law and make those considerations their first priority.
Tool Rental Collections: Let SWR Do The Heavy Lifting
Southwest Recovery Services can take on your unpaid debt and resolve it quickly. We use proven best practices to relate to your clients and compel them to pay. We also have the resources at our disposal to take meaningful action to persuade and promote payment, such as credit reporting and legal action. Plus, we are a contingency collection agency, meaning there is no upfront liability to give us a try. Give us a call today to start collecting your outstanding debt!