Picking a credit collection agency is possibly the most difficult and essential job. Some factors you must consider while choosing a debt collector are:
- Experience and specialists
- Geographical presence
- Competence
- Costs and charging design
- Customer references
- Debt Collection Agency Solutions has actually covered this subject in depth through numerous complimentary collections reports and articles on this site.
Step II - Hiring the Debt Collection Agency and Setting Up Processes
When you choose the debt collector, 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, of course, prepare it correctly. Just make sure that you include important clauses such as confidentiality and non-disclosure. You are likely to pass sensitive information to the collection agency such as your account receivables, customer contacts, product and services pricing, etc. to facilitate faster debt collection. You want to be sure that this information 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 well-defined your processes are and how strictly they are followed. Important processes you have 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 prior to you make a sincere 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 pointed out previously, it is essential for you to guarantee the security of the information you provide to the debt collector. The debt collection agency may use several of its involved agencies to obtain details about defaulting clients. You require to set up a clear procedure on how much information they can share with such 3rd celebrations.
Communication: You have to establish single point contacts for communication within the collection and the business agency. In debt collection practices, the timing of communication is exceptionally crucial and thus it will go a long way in choosing the success of your debt collection procedure. Again, the value of debt collection software application can not be 888-591-3861 overemphasized here.
Action III - Performance Tracking
When all processes are set, begin keeping track of the efficiency of the debt collection agency. When dealing with a collection agency, this is an ongoing procedure. Important criteria to keep track of are:
Quantitative
- Number 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.
- Percentage of debt recuperated 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 collector for full/partial credit collection.
Qualitative
* How well do the collection agency specialists deal with your consumers?
* 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 procedures and guidelines set by you?
Action IV - Agreement Closure
Hopefully, the picked collection agency will work best for you. If it does not, then you need to transfer all your debt collection procedures from the agency. You ought to keep in mind the following important points when you are ending the agreement:
Privacy and non-disclosure clauses apply even after the end of the agreement with the collection agency in addition to its staff members. The collection agency returns all files connected to your company and damages all information related to your company from their information storage.
You are likely to pass sensitive info to the collection agency such as your account receivables, consumer contacts, product and services prices, and so on to facilitate faster debt collection. Setting up processes is a really important step in dealing with the collection agency. The collection agency might utilize one or more of its associated companies to get details about defaulting consumers. In debt collection practices, the timing of communication is very crucial and hence it will go a long way in choosing the success of your debt collection procedure. If it does not, then you need to transfer all your debt collection procedures from the agency.
