Choosing a credit debt collector is perhaps the most hard and important task. Some elements you should think about while picking a collection agency are:
- Experience and experts
- Geographical existence
- Expertise
- Charges and charging model
- Client referrals
- Collection Agency Services has covered this subject in depth through different complimentary collections reports and posts on this website.
Step II - Hiring the Collection Agency and Setting Up Processes
When you choose the debt collection agency, the very first 2 actions you need to take are:
Participate in an agreement with the agency;
Establish procedures on how you are going to interact with the agency.
An agreement is the legal document and your legal experts will, obviously, prepare it correctly. Just ensure that you include essential stipulations such as privacy and non-disclosure. You are most likely to pass delicate information to the collection agency such as your account receivables, customer contacts, product and services prices, and so on to help with faster debt collection. You wish to make sure that this info does not fall in the wrong hands.
Establishing procedures is an essential step in handling 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. Essential procedures you need to specify are:
Internal processes: You need to put in place a clear process on defining bad debt and referring the case to the collection agency. You do not wish to refer the case to the collection agency prior to you make a sincere effort to collect the charges internally.
Details transfer: How will you move the info to the debt collection agency about your dues and defaulting customers, and how will you get the details from your debt collection agency? Debt collection software can make the information transfer procedure simple and secured.
Third party dealing: As pointed out previously, it is essential for you to guarantee the security of the information you give to the debt collector. The debt collector might use one or more of its involved companies to get details about defaulting consumers. You require to set up a clear protocol on how much information they can share with such 3rd parties.
Communication: You have to set up single point contacts for communication within the business and the collection agency. In debt collection practices, the timing of communication is incredibly crucial and thus 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 overemphasized here.
Action III - Performance Tracking
When all procedures are set, begin keeping an eye on the performance of the collection agency. When dealing with a collection agency, this is an ongoing process. Crucial parameters to monitor are:
Quantitative
- Variety of cases described the credit collection agency and portion of cases successfully fixed by them.
- Percentage of debt recuperated by the debt collection agency from all cases referred.
- Percentage of debt recovered by the debt collection agency 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 specialists deal with your customers?
* 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 - Agreement Closure
Ideally, the chosen 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 business and ruins all details related to your business from their data storage.
You are most likely to pass sensitive info to the collection agency such as your account receivables, consumer contacts, item and services pricing, and so on to assist in faster debt collection. Setting up processes is an extremely crucial action in dealing with the collection agency. The collection agency may utilize one or more of its involved agencies to get info about defaulting clients. In debt collection practices, the timing of interaction is extremely essential and for this Zenith Financial Network 888-591-3861 reason it will go a long way in deciding the success of your debt collection process. If it does not, then you require to transfer all your debt collection processes from the agency.
