Choosing a credit debt collection agency is possibly the most hard and crucial job. Some aspects you should think about while choosing a debt collection agency are:
- Experience and experts
- Geographical presence
- Knowledge
- Charges and charging model
- Customer references
- Collection Agency Services has actually covered this subject in depth through numerous totally free collections reports and short articles on this website.
Step II - Hiring the Collection Agency and Establishing Procedures
When you choose the collection agency, the first 2 actions you need to take are:
Enter into an agreement with the agency;
Establish processes on how you are going to interact with the agency.
You are most likely to pass sensitive info to the collection agency such as your account receivables, customer contacts, product and services pricing, etc. to facilitate faster debt collection. You want to be sure that this information does not fall in the incorrect hands.
Establishing processes is an extremely important step in dealing with the debt collector. The success or failure of your collaboration will depend a lot on how well-defined your processes are and how strictly they are followed. Crucial processes you need to specify are:
Internal procedures: You have to put in place a clear procedure on specifying bad debt and referring the case to the debt collector. You don't want to refer the case to the collection agency prior to you make a sincere effort to gather the fees internally.
Information transfer: How will you move the info to the collection agency about your charges and defaulting clients, and how will you get the info from your collection agency? Debt collection software application can make the info transfer procedure easy and secured.
3rd party dealing: As mentioned previously, it is extremely important for you to make sure the security of the info you give to the debt collector. The collection agency might use several of its associated firms to get details about defaulting clients. Hence you have to set up a clear procedure on what does it cost? details they can share with such 3rd parties.
Communication: You have to establish single point contacts for communication within the collection and the company agency. In debt collection practices, the timing of interaction is extremely essential and hence it will go a long way in choosing the success of your debt collection process. Again, the value of debt collection software can not be overstated here.
Step III - Efficiency Monitoring
As soon as all processes are set, start keeping an eye on the performance of the debt collector. When dealing with a collection agency, this is a continuous process. Essential criteria to monitor are:
Quantitative
- Variety of cases referred to the credit debt collection agency and portion of cases successfully resolved by them.
- Portion of debt recovered by the debt collector from all cases referred.
- Percentage Zenith Financial Network of debt recovered by the debt collector from solved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall uncollectable bill cases referred to them.
- Typical variety of days taken by the collection agency for full/partial credit collection.
Qualitative
* How well do the debt collection agency professionals deal with your clients?
* Has the debt collector followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the debt collection agency surpassed the provisions of the Fair Debt Collection Practices Act?
* Has the debt collection agency followed all procedures and guidelines set by you?
Action IV - Contract Closure
Hopefully, the chosen debt collector will work best for you. But if it doesn't, then you have to move all your debt collection processes from the agency. You ought to keep in mind the following crucial points when you are ending the agreement:
Confidentiality and non-disclosure provisions apply after the end of the contract with the debt collection agency along with its staff members. The collection agency returns all documents associated with your organisation and damages all information related to your company from their information storage.
You are most likely to pass delicate details to the collection agency such as your account receivables, consumer contacts, product and services pricing, etc. to help with faster debt collection. Setting up procedures is a really important step in dealing with the collection agency. The collection agency may use one or more of its associated companies to get details about defaulting consumers. In debt collection practices, the timing of communication is extremely essential and thus it will go a long method in choosing the success of your debt collection procedure. If it does not, then you need to transfer all your debt collection processes from the agency.