Selecting a credit debt collection agency is maybe the most important and challenging task. Some elements you need to consider while choosing a debt collection agency are:
- Experience and specialists
- Geographical presence
- Knowledge
- Costs and charging model
- Client recommendations
- Debt Collector Provider has covered this topic in depth through different totally free collections reports and posts on this website.
Action II - Employing the Collection Agency and Setting Up Processes
As soon as you select the debt collection agency, the very first two steps you need to take are:
Enter into an agreement with the agency;
Set up processes 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 ensure that you include essential provisions such as privacy and non-disclosure. You are likely to pass sensitive info to the collection agency such as your balance due, consumer contacts, product or services rates, and so on to assist in faster debt collection. You wish to make certain that this details does not fall in the incorrect hands.
Setting up procedures is a crucial step in handling the debt collector. The success or failure of your collaboration will depend a lot on how distinct your processes are and how strictly they are followed. Important processes you need to specify are:
Internal procedures: 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 before you make a sincere effort to collect the charges internally.
Details transfer: How will you move the info to the collection agency about your dues and defaulting consumers, and how will you get the info from your collection agency? Debt collection software can make the details transfer procedure easy and secured.
Third party dealing: As pointed out previously, it is extremely important for you to ensure the security of the details you provide to the debt collection agency. The collection agency may utilize one or more of its associated firms to obtain information about defaulting customers. You need to set up a Zenith Financial Network clear protocol on how much details 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 value of debt collection software can not be overstated here.
Step III - Efficiency Tracking
Once all procedures are set, start monitoring the efficiency of the 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 debt collector from resolved cases.
- Portion 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 collection agency specialists deal with your clients?
* Has the collection agency followed all legal requirements pointed out in the Fair Debt Collection Practices Act?
* Has the collection agency surpassed the provisions of the Fair Debt Collection Practices Act?
* Has the debt collection agency followed all processes and guidelines set by you?
Action IV - Contract Closure
Hopefully, the picked collection agency will work best for you. If it doesn't, then you require to transfer all your debt collection procedures from the agency. You should remember the following essential points when you are ending the agreement:
Confidentiality and non-disclosure provisions apply even after the end of the agreement with the collection agency as well as its staff members. The collection agency returns all documents connected to your business and ruins all details related to your business from their information storage.
You are most likely to pass sensitive info to the collection agency such as your account receivables, client contacts, item and services pricing, etc. to help with faster debt collection. Setting up procedures is a really important step in dealing with the collection agency. The collection agency might utilize one or more of its associated agencies to get info about defaulting consumers. In debt collection practices, the timing of communication is incredibly crucial and for this 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.
