Picking a credit collection agency is maybe the most tough and crucial task. Some aspects you need to consider while selecting a collection agency are:
- Experience and specialists
- Geographical existence
- Knowledge
- Costs and charging model
- Customer references
- Collection Agency Services has actually covered this topic in depth through numerous free collections reports and posts on this site.
Action II - Hiring the Debt Collector and Setting Up Procedures
Once you choose the debt collection agency, the very first 2 steps you have to take are:
Participate in a contract with the agency;
Establish procedures on how you are going to communicate with the agency.
An agreement is the legal document and your legal experts will, of course, prepare it correctly. Just make certain that you consist of essential stipulations such as privacy and non-disclosure. You are most likely to pass delicate details to the collection agency such as your receivable, customer contacts, services and product prices, and so on to assist in faster debt collection. You wish to make certain that this info does not fall in the incorrect hands.
Setting up processes is an extremely important 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 need to specify are:
Internal processes: You have to put in place a clear procedure on specifying uncollectable bill and referring the case to the debt collection agency. You do not want to refer the case to the collection agency before you make a genuine effort to collect the dues internally.
Information transfer: How will you transfer the info to the debt collection agency about your charges and defaulting customers, and how will you receive the information from your collection agency? Debt collection software can make the information transfer procedure easy and secured.
3rd party dealing: As discussed previously, it is extremely important for you to ensure the security of the details you offer to the debt collector. The debt collector may utilize several of its involved firms to get information about defaulting clients. 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 interaction within the collection and the business agency. In debt collection practices, the timing of communication is exceptionally essential and hence it will go a long way in deciding the success of your debt collection procedure. Again, the value of debt collection software can not be overstated here.
Step III - Efficiency Tracking
Once all processes are set, begin keeping track of the performance of the collection agency. When dealing with a collection agency, this is a Zenith Financial Network 888-591-3861 continuous process. Essential criteria to keep track of are:
Quantitative
- Variety of cases referred to the credit collection agency and percentage of cases successfully fixed by them.
- Portion of debt recovered by the debt collection agency from all cases referred.
- Portion of debt recuperated by the debt collection agency from resolved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall bad debt cases described them.
- Average number of days taken by the debt collector for full/partial credit collection.
Qualitative
* How well do the debt collector experts handle your customers?
* Has the debt collector followed all legal requirements discussed in the Fair Debt Collection Practices Act?
* Has the debt collector exceeded the arrangements of the Fair Debt Collection Practices Act?
* Has the debt collection agency followed all standards and procedures set by you?
Step IV - Agreement Closure
Hopefully, the chosen debt collector will work best for you. But if it does not, then you have to transfer all your debt collection procedures from the agency. You should remember the following crucial points when you are ending the agreement:
Privacy and non-disclosure provisions are applicable after the end of the contract with the debt collection agency along with its workers. The debt collection agency returns all files related to your company and damages all details 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, consumer contacts, product and services pricing, etc. to help with faster debt collection. Setting up procedures is a really crucial action in dealing with the collection agency. The collection agency may use one or more of its involved companies to get information about defaulting consumers. In debt collection practices, the timing of interaction is exceptionally crucial and for this reason 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 from the agency.
