Choosing a credit collection agency is possibly the most important and challenging task. Some factors you should think about while picking a collection agency are:
- Experience and experts
- Geographical existence
- Proficiency
- Charges and charging design
- Consumer referrals
- Collection Agency Services has covered this topic in depth through different complimentary collections reports and posts on this website.
Step II - Hiring the Debt Collection Agency and Setting Up Procedures
When you pick the debt collector, the very first 2 actions you need to take are:
Enter into a contract with the agency;
Set up processes on how you are going to interact with the agency.
You are most likely to pass delicate details to the collection agency such as your account receivables, client contacts, product and services prices, etc. to facilitate faster debt collection. You want to be sure that this details does not fall in the incorrect hands.
Establishing procedures is an essential step in dealing with the debt collection agency. The success or failure of your partnership will depend a lot on how well-defined your processes are and how strictly they are followed. Crucial procedures you have to specify are:
Internal processes: You have to put in place a clear process on specifying uncollectable bill and referring the case to the debt collection agency. You don't want to refer the case to the collection agency before you make a genuine effort to gather the fees internally.
Info transfer: How will you transfer the information to the debt collector about your charges and defaulting consumers, and how will you receive the info from your collection agency? Debt collection software application can make the details transfer procedure easy and secured.
3rd party dealing: As pointed out earlier, it is extremely important for you to ensure the security of the details you provide to the debt collection agency. The debt collection agency may utilize several of its associated agencies to obtain info about defaulting customers. Hence you need to set up a clear procedure on just how much information they can share with such 3rd parties.
Interaction: You need to set up single point contacts for interaction within the collection and the company agency. In debt collection practices, the timing of interaction is incredibly important and for this reason it will go a long way in deciding the success of your debt collection process. Once again, the significance of debt collection software can not be overstated here.
Step III - Efficiency Tracking
Once all procedures are set, start monitoring the efficiency of the collection agency. This is a continuous procedure when dealing with a collection agency. Crucial specifications to monitor are:
Quantitative
- Variety of cases referred to the credit debt collector and percentage of cases effectively resolved by them.
- Percentage of debt recuperated by the collection agency from all cases referred.
- Portion of debt recovered by the debt collector from solved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall bad debt cases referred to them.
- Typical number of days taken by the debt collector for full/partial credit collection.
Qualitative
* How well do the debt collection agency professionals deal with your consumers?
* Has the debt collection agency followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the debt collection agency gone beyond the provisions of the Fair Debt Collection Practices Act?
* Has the debt collector followed all guidelines and procedures set by you?
Step IV - Contract Closure
Ideally, the selected debt collector will work best for you. But if it does not, then you need to transfer all your debt collection procedures from the agency. You need to remember the following essential points when you are ending the agreement:
Confidentiality and non-disclosure stipulations are applicable even after completion of the contract with the debt collection agency as well as its workers. The debt collector returns all documents associated with your organisation and destroys all info related to your business from their data storage.
You are most likely to pass delicate information to the collection agency such as your account receivables, client contacts, item and services pricing, and so on to assist in faster debt collection. Setting up procedures is a very important action in dealing with the collection agency. The collection agency may utilize one or more of its involved firms to get information about defaulting clients. In debt collection practices, the timing of interaction is exceptionally important and thus it will go a long method in choosing the success of your debt collection process. If it doesn't, then you need to move all your debt collection procedures Zenith Financial Network from the agency.
