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


Even as propane companies might supply their customers year round, their busier season is obviously during the colder winter months, when fuel usage increases. Billing practices can differ by business, but customers frequently contract for delivery services and are billed at 30 days.
Due to the seasonal nature, with greater demand and activity in the winter, debt collection problems can increase. As companies get busier with more frequent deliveries, their accounts receivable delinquencies also multiply, especially if in house debt collection efforts are intermittent and inconsistent.


These problems are further amplified as propane businesses are usually unwilling to cease service for non-payment, given that heating is such a essential need. They don’t want to be viewed negatively in the community. Smaller businesses tend to know most of their customers. Larger businesses with a much bigger customer base can get even further behind on their difficult receivables.


Owners also have to weigh possibly alienating and losing clients to the competition, while trying to get a handle on their growing delinquency issues.

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


Early Intervention Is Important
Usually, propane companies bill and invoice customers at 30 days. Though, it’s not uncommon for unpaid accounts to go beyond 60, 90 days or more.

As hectic winter delivery schedules can take priority over recovering on past due bills, it’s crucially important to enlist the services of a debt collection agency, because the more these accounts age, they become more problematic to recover.


If these accounts are placed early enough, at around 60 to 75 days, not only are the collection success 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 Expensive Than In House Efforts
Many propane companies don’t have the necessary staffing, means and knowledge necessary to successfully and consistently recover on their past due debts. Several 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 solution for going after these late debts. There are agencies that will charge a small preset cost or flat fee to collect. Because many of these debts tend to be smaller balances, using a fixed fee agency will cost significantly less than trying to recover on these accounts in house.

Propane businesses may also use conventional contingency fee agencies, but some percentage based agencies may treat these smaller balance accounts with lesser importance than their larger account clients. This is called "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 serious than hearing from an employee of your company. Most also fear hurting their credit rating, so a debt collection agency can act as a better inducement for honoring their debt.

As diplomacy is very important, and you don’t want to estrange your customers, collection agencies can employ more tactful and diplomatic methods to encourage customers to bring their accounts up to date. Because they act as a impartial third party, this removes you from having to be the “bad guy” in pursuing your problematic clients.

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