Selecting a credit debt collection agency is possibly the most crucial and difficult job. Some aspects you must consider while choosing a debt collector are:
- Experience and specialists
- Geographical presence
- Proficiency
- Charges and charging design
- Consumer referrals
- Collection Agency Services has covered this topic in depth through different totally free collections reports and posts on this website.
Action II - Hiring the Collection Agency and Setting Up Processes
When you pick the collection agency, the first two steps you need to take are:
Enter into a contract 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, of course, prepare it correctly. Simply make certain that you consist of essential clauses such as privacy and non-disclosure. You are most likely to pass sensitive information to the collection agency such as your account receivables, customer contacts, product or services prices, etc. to assist in faster debt collection. You wish to make sure that this information does not fall in the wrong hands.
Establishing processes is a crucial step in handling the collection agency. 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 processes you have to define are:
Internal procedures: You need to put in place a clear procedure on defining uncollectable bill and referring the case to the debt collection agency. You do not wish to refer the case to the collection agency before you make a sincere effort to collect the dues internally.
Information transfer: How will you transfer the information to the collection agency about your fees and defaulting clients, and how will you get the details from your debt collection agency? Debt collection software can make the details transfer procedure simple and protected.
3rd party dealing: As mentioned earlier, it is essential for you to make sure the security of the info you offer to the debt collection agency. The debt collection agency might utilize one or more of its involved companies to get information about defaulting consumers. Thus you need to establish a clear procedure on just how much details they can share with such 3rd parties.
Interaction: You need to establish single point contacts for interaction within the company and the collection agency. In debt collection practices, the timing of communication is very essential and thus it will go a long way in choosing the success of your debt collection procedure. Once again, the significance of debt collection software application can not be overemphasized here.
Action III - Performance Tracking
Once all procedures are set, start keeping an eye on the performance of the debt collector. When dealing with a collection agency, this is a continuous process. Crucial specifications to Zenith Financial Network 888-591-3861 monitor are:
Quantitative
- Variety of cases referred to the credit debt collector and percentage 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 debt collector from resolved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall 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 handle your customers?
* Has the debt collector followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the debt collector gone beyond the arrangements of the Fair Debt Collection Practices Act?
* Has the collection agency followed all processes and guidelines set by you?
Step IV - Agreement Closure
Hopefully, the picked debt collection agency will work best for you. If it doesn't, then you require to move all your debt collection processes from the agency. You need to remember the following crucial points when you are ending the contract:
Privacy and non-disclosure provisions apply after completion of the agreement with the debt collection agency along with its employees. The debt collector returns all files related to your service and damages all information related to your business from their data storage.
You are likely to pass sensitive details to the collection agency such as your account receivables, customer contacts, product and services rates, etc. to facilitate faster debt collection. Setting up procedures is a really important step in dealing with the collection agency. The collection agency may use one or more of its associated firms to get information about defaulting clients. In debt collection practices, the timing of interaction is extremely important and thus it will go a long method in choosing the success of your debt collection process. If it does not, then you require to transfer all your debt collection processes from the agency.