Farm supply and agriculture businesses expect a collection agency to be easy to use and to offer cost-effective services. The agency must efficiently recover overdue accounts receivable while preserving their valuable customer relationships.
They anticipate that the agency will understand the agricultural industry’s seasonal cash flow challenges and approach debtors with tact and professionalism. Additionally, they expect the agency to operate ethically and in compliance with all relevant laws and regulations, provide clear communication and regular updates on collection efforts, and employ strategies that maximize recovery rates without harming the business’s reputation or future sales opportunities.
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We understand: Because the pool of customers is not vast, it becomes crucial for businesses operating in agriculture sector to focus on retaining the customers they already have.
Collection Agency Services
A collection agency should offer both fixed-fee and contingency-fee services and clearly communicate to clients which services are best suited for each stage.
When payments are not received by the due date, the invoices become overdue AR, impacting the supplier’s cash flow and financial stability. The farm supply business may then initiate collection efforts using a professional collection agency, such as sending reminders, making collection calls, renegotiating payment terms, imposing late fees, or, in severe cases, pursuing legal action to recover the owed amounts (after taking client’s permission).
Common Reasons for Overdue AR
Overdue accounts receivable for farm supply businesses are created when customers—typically farmers, ranchers, or agricultural enterprises—purchase goods or services on credit and fail to pay within the agreed-upon terms. These debts could be consumer or commercial.
Farm supply businesses often extend credit to accommodate the seasonal nature of agriculture, where expenses for seeds, fertilizers, and equipment occur well before income from harvests is realized. However, factors like cash flow issues, disputes related to equipment malfunction or breakdown, poor crop yields, low commodity prices, or unexpected operational challenges can hinder customers from making timely payments.