Choosing a credit collection agency is perhaps the most essential and hard job. Some factors you must consider while choosing a debt collection agency are:
- Experience and specialists
- Geographical existence
- Proficiency
- Costs and charging model
- Customer references
- Debt Collector Provider has covered this topic in depth through various totally free collections reports and short articles on this website.
Action II - Working With 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 file and your legal experts will, naturally, prepare it properly. Simply make sure that you include important provisions such as confidentiality and non-disclosure. You are likely to pass delicate info to the collection agency such as your balance due, client contacts, services and product 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 dealing with the debt collection agency. The success or failure of your partnership will depend a lot on how well-defined your procedures are and how strictly they are followed. Crucial procedures you have to define are:
Internal processes: You need to put in place a clear procedure on specifying bad debt and referring the case to the debt collection agency. You don't wish to refer the case to the collection agency prior to you make a genuine effort to collect the dues 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 info from your debt collection agency? Debt collection software can make the information transfer procedure simple and secured.
Third party dealing: As mentioned previously, it is essential for you to guarantee the security of the information you provide to the debt collector. The debt collection agency may utilize several of its associated firms to obtain info about defaulting customers. For this reason you have to set up a clear procedure on what does it cost? info they can share with such 3rd parties.
Interaction: You need to set up single point contacts for interaction within the company and the collection agency. In debt collection practices, the timing of interaction is very important and for this reason it will go a long way in choosing the success of your debt collection process. Once again, the significance of debt collection software can not be overstated here.
Step III - Efficiency Monitoring
Once all procedures are set, begin keeping track of the efficiency of the debt collector. This is a continuous process when handling a collection agency. Essential parameters to monitor are:
Quantitative
- Number of cases described the credit collection agency and percentage of cases effectively solved by them.
- Portion of debt recovered by the debt collector from all cases referred.
- Percentage of debt recuperated by the debt collection agency from fixed 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 collector for full/partial credit collection.
Qualitative
* How well do the debt collection agency specialists deal with your consumers?
* Has the debt collection agency followed all legal requirements pointed out 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 collector followed all standards and processes set by you?
Action IV - Contract Closure
Ideally, the selected debt collection agency will work best for you. However if it doesn't, then you have to transfer all your debt collection processes from the agency. You ought to keep in mind the following important points when you are ending the contract:
Privacy and non-disclosure clauses apply after the end of the contract with the debt collector 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 delicate information to the collection agency such as your account receivables, client contacts, item and services pricing, etc. to assist in faster debt collection. Setting up procedures is a very essential action in dealing with the collection agency. The collection agency might use one or more of its associated firms to get information about defaulting customers. In debt Zenith Financial Network 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 from the agency.
