Selecting a credit collection agency is possibly the most crucial and challenging job. Some factors you should think about while selecting a collection agency are:
- Experience and experts
- Geographical existence
- Competence
- Fees and charging model
- Client referrals
- Debt Collector Services has covered this topic in depth through various free collections reports and articles on this site.
Step II - Hiring the Collection Agency and Establishing Procedures
As soon as you pick the debt collection agency, the very first two steps you need to take are:
Participate in a contract with the agency;
Set up processes on how you are going to interact with the agency.
You are most likely to pass sensitive information to the collection agency such as your account receivables, consumer contacts, item and services pricing, and so on to help with faster debt collection. You want to be sure that this details does not fall in the wrong hands.
Establishing procedures is a crucial step in dealing with the debt collector. The success or failure of your collaboration will depend a lot on how well-defined your procedures 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 uncollectable bill and referring the case to the debt collection agency. You do not want to refer the case to the collection agency prior to you make a genuine effort to collect the fees internally.
Information transfer: How will you move the information to the debt collector about your dues and defaulting clients, and how will you receive the info from your collection agency? Debt collection software application can make the info transfer procedure easy and secured.
3rd party dealing: As mentioned earlier, it is very important for you to guarantee the security of the details you give to the debt collection agency. The debt collection agency might utilize one or more of its involved firms to obtain information about defaulting clients. You require to set up a clear protocol on how much information they can share with such third parties.
Communication: You need to set up single point contacts for interaction within the collection and the business agency. In debt collection practices, the timing of interaction is incredibly essential and thus it will go a long way in choosing the success of your debt collection procedure. Once again, the importance of debt collection software application can not be overstated here.
Step III - Performance Tracking
When all processes are set, begin keeping track of the efficiency of the debt collection agency. This is an ongoing procedure when dealing with a collection agency. Important criteria to keep track of 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.
- Portion of debt recovered by the collection agency from resolved cases.
- Percentage of quantity paid as fees/commission to the collection agency to the total uncollectable bill cases referred to them.
- Typical number of days taken by the debt collection agency for full/partial credit collection.
Qualitative
* How well do the collection agency experts deal with your clients?
* Has the collection agency followed all legal requirements discussed in the Fair Debt Collection Practices Act?
* Has the collection agency exceeded 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 selected collection agency will work best for you. However if it doesn't, then you need to move all your debt collection processes from the agency. You should keep in mind the following crucial points when you are ending the contract:
Privacy and non-disclosure clauses apply after completion of the agreement with the debt collection agency along with its employees. The debt collection agency returns all files connected to your organisation and damages all details related to your organisation from their data storage.
You are likely to pass delicate information to the collection agency such as your account receivables, consumer contacts, product and services pricing, etc. to facilitate faster debt collection. 888-591-3861 Setting up procedures is an extremely essential action in dealing with the collection agency. The collection agency may use one or more of its involved companies to get information about defaulting clients. In debt collection practices, the timing of interaction is incredibly crucial and hence it will go a long way in choosing the success of your debt collection process. If it doesn't, then you require to move all your debt collection processes from the agency.
