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LCO Collection Service???

Discussion in 'General Industry Discussions' started by Lizard Lawn Care, Jun 29, 2006.

  1. Lizard Lawn Care

    Lizard Lawn Care LawnSite Member
    Posts: 39

    If I started a collection agency specific to the green agency, for past due accounts, how many of you guys would use my service. Price would depend on 2 things:
    1. handshake agreement or signed contract.
    2. length of delinquency.

    payment would only be made after funds collected???
  2. DistLawns

    DistLawns LawnSite Member
    from Midwest
    Posts: 120

    I would give it a shot
  3. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    If you were to do something like this, I would let you keep 30% of any and all money collected - The way it works is you collect the amount due in YOUR name / co.name and deposit the check, then after it clears you send me a check for the 70% and everybody wins.

    You might need some type of notarized letter of authority from each Lco you work for, I don't know exactly but you need to make sure you get paid LOL. And yes you would have to accept verbals, I have no problem with verbals myself because to me, your mouth speaks in God's presence so what your mouth utters, thine arse must cover.

    And if 30% seems high, rest assured it isn't, that's standard for an 'active' collection agency (meaning one that produces results) because anything less won't give you enough incentive, so to speak. The beauty of it is, most guys like myself won't care how you do it, you're the only one that has to worry about legalities because I sure won't care LOL.

    You could easily expand into a few other 'service' companies such as Limo services, house cleaning and car detailers to name a few.

    And yes, I'd send you every last one so fast, I would love nothing more than to have some agency like that, a tough one that gets the message across while I keep my hands clean and collects most of the time (nobody is perfect lol but you know what I mean).
  4. Lizard Lawn Care

    Lizard Lawn Care LawnSite Member
    Posts: 39

    Actually, I have extensive collection and management expirence and this is how the figures would work:

    If account was 30-90 days "past due" 40% collection - 60% LCO
    If account was 91-180 days "ast due" 60% collection - 40% LCO
    If account greater than 180 days "past due" 75% collection - 25% LCO

    The purpose of the agency is to collect on an LCO's potential write-off, not do general account collections. A threat to report to the 3 major credit agencies is an incentitive to pay your bills.......

    This may seem high to some, but there ae costs in perating any business, and I will be trying to collect on bills you have already tried to collect on and gave up on.....:) :)
  5. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    Don't forget that Federal law will require you as a Debt Collector to be licensed and registered with every State Department of Insurance that you do any collection activity in, along with being insured and Bonded and also licensed with the Federal Trade Commission.
  6. Surf'n'Turf

    Surf'n'Turf LawnSite Senior Member
    Posts: 326

    why limit yourself to just LCO's....all service businesses go through the same crap.
  7. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    oic, no I was thinking more along the lines of handing them over before I even try to fool with it. But I also understand your position better now, you have no way of knowing if I didn't already try heheh
  8. Luvs2Play

    Luvs2Play LawnSite Member
    Posts: 246

    Our local credit agency takes them at 60 days, files on their credit report and never charges over 50%. Usually 33% unless it goes over 365 days. I just wait for the check to come. I've heard of higher rates like you are wanting to charge. I have had great luck with the two I have turned over, and both times were 33%. Ten minutes with them, they do all the work.
  9. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    I always report slow payers to the big 3

    BUT there not the credit reporting agencies. They take to long, the other big 3collect on the spot. They work for beer and bail money. The first is always payed the second only on rare occasions, success rate 100% :drinkup:

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