Choosing a credit debt collector is perhaps the most hard and important task. Some elements you need to think about while selecting a debt collection agency are:
- Experience and experts
- Geographical existence
- Expertise
- Fees and charging model
- Client referrals
- Debt Collector Services has covered this topic in depth through various totally free collections reports and short articles on this website.
Action II - Hiring 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.
You are most likely to pass delicate details to the collection agency such as your account receivables, consumer contacts, item and services prices, and so on to help with faster debt collection. You desire to be sure that this info does not fall in the wrong hands.
Setting up processes is an extremely important step in dealing with the collection agency. The success or failure of your collaboration will depend a lot on how distinct your procedures are and how strictly they are followed. Essential processes you need to define are:
Internal processes: You need to put in place a clear procedure on specifying uncollectable bill and referring the case to the debt collection agency. You don't want to refer the case to the collection agency before you make a sincere effort to collect the dues internally.
Details transfer: How will you move the details to the debt collection agency about your fees and defaulting customers, and how will you receive the details from your debt collector? Debt collection software application can make the info transfer process simple and protected.
Third party dealing: As discussed earlier, it is crucial for you to make sure the security of the info you give to the collection agency. The debt collector might use one or more of its involved companies to get information about defaulting consumers. You need to set up a clear procedure on how much details they can share with such third parties.
Interaction: You need to establish single point contacts for interaction within the collection and the company agency. In debt collection practices, the timing of interaction is incredibly important and for this reason it will go a long way in deciding the success of your debt collection procedure. Once again, the importance of debt collection software application can not be overemphasized here.
Step III - Efficiency Monitoring
As soon as all procedures are set, start keeping an eye on the efficiency of the collection agency. This is a continuous process when dealing with a collection agency. Crucial specifications to monitor are:
Quantitative
- Variety of cases referred to the credit debt collector and percentage of cases effectively resolved by them.
- Percentage of debt recuperated by the 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 bad debt cases referred to them.
- Average variety of days taken by the debt collection agency for full/partial credit collection.
Qualitative
* How well do the collection agency experts deal with your clients?
* Has the collection agency followed all legal requirements discussed in the Fair Debt Collection Practices Act?
* Has the collection agency surpassed the provisions of the Fair Debt Zenith Financial Network Inc Collection Practices Act?
* Has the debt collection agency 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 move all your debt collection processes from the agency. You ought to keep in mind the following important points when you are ending the agreement:
Privacy and non-disclosure provisions apply even after the end of the agreement with the collection agency in addition to its staff members. The collection agency returns all files related to your company and damages all information related to your company from their information storage.
You are likely to pass sensitive details 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 customers. 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 doesn't, then you need to transfer all your debt collection procedures from the agency.