Propane gas companies' services are in great demand to businesses and clients all over the country.. Many people, principally in rural areas, use propane for cooking and/or to warm their homes during the winter.


Although propane businesses might provide their customers year round, their busier season is obviously during the colder winter months, when fuel usage peaks. Billing procedures can vary by company, but customers typically contract for delivery services and are billed at 30 days.
Because of the seasonal nature, with greater demand and activity in the winter, debt collection problems can intensify. As businesses get busier with more frequent deliveries, their accounts receivable challenges also mount, especially if in house debt collection attempts are intermittent and lacking consistency.


These issues are further amplified as propane businesses are averse to suspend service for non-payment, given that heating is such a important necessity. Keeping a good image in the community is important. Smaller companies tend to know most of their clientèle. Larger companies with a much bigger customer base can get even further behind on their problematic receivables.


Business owners also cope with needing to get a handle on their increasing accounts receivable issues, while trying to avoid losing their clientèle to competitors.

Below are 3 Crucial Reasons Why Propane Businesses Should Hire Debt Collection Agencies:


Early Intervention Is Crucial
Generally, propane companies bill and invoice customers at 30 days. It's not uncommon for past due accounts to go past 60, 90 days, and even more.

As hectic winter delivery schedules take primacy over one's bad debt, hiring a debt collection agency becomes even more important. It becomes harder to recover on non-paying accounts the more they get older.


If these receivables are placed early enough, at around 60 to 75 days, not only are the collection recovery rates much greater, its also early enough to get clients back on good terms with the fuel supplier, and before the late balances grow even higher.



More Cost Beneficial Than In House CollectingLess Costly Than In House Efforts
Several propane companies don’t have the necessary staffing, resources and knowledge necessary to effectively and regularly collect on their past due accounts. Some end up writing off a percentage of their bad debt because of the inability to recover. Debt collection agencies are the ideal and cost effective answer for going after these late receivables. There are agencies that will charge a small preset cost or flat fee to collect. In view of the fact that many of these accounts tend to be smaller balances, using a flat fee agency will cost far less than trying to recover on these accounts internally.

Propane businesses may also think about conventional contingency fee agencies, but some contingency based agencies may treat these smaller balance accounts with lesser importance than their larger account clients. This is known as "skimming."


Third Party Impact Makes A Huge Difference
Hearing from a third party collection agency will have a greater psychological impact and be considered as more impactful than hearing from a representative of your business. Many also worry about hurting their credit score, so a debt collection agency can act as an additional motivation for payment.

As tact is very important, and you don’t want to alienate your customers, collection agencies can employ more tactful and diplomatic methods to persuade customers to bring their accounts up to date. Since they act as a unbiased third party, this removes you from having to be the “bad guy” in going after your difficult customers.

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