Picking a credit collection agency is possibly the most crucial and difficult job. Some aspects you need to consider while selecting a debt collection agency are:
- Experience and specialists
- Geographical existence
- Expertise
- Fees and charging model
- Client referrals
- Debt Collector Services has covered this topic in depth through different totally free collections reports and short articles on this website.
Action II - Working With the Debt Collector and Establishing Procedures
As soon as you pick the collection agency, the first two steps you have to take are:
Enter into a contract with the agency;
Set up processes on how you are going to communicate with the agency.
A contract is the legal document and your legal experts will, obviously, prepare it correctly. Just ensure that you include essential provisions such as privacy and non-disclosure. You are most likely to pass sensitive 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 a crucial 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 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 fees and defaulting customers, and how will you get the details 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 use several of its associated agencies to obtain details about defaulting clients. Hence you have to set up a clear protocol on what does it cost? details they can share with such third parties.
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 essential and hence it will go a long way in choosing the success of your debt collection procedure. Again, the value of debt collection software can not be overemphasized here.
Action III - Performance Monitoring
When all processes are set, begin keeping track of the performance of the debt collector. 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 fixed cases.
- Percentage of quantity paid as fees/commission to the collection agency to the total uncollectable bill cases referred to them.
- Average variety of days taken by the collection agency for full/partial credit collection.
Qualitative
* How well do the debt collector experts handle your customers?
* 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 collection agency followed all procedures and guidelines set by you?
Step IV - Agreement Closure
Hopefully, the chosen 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 need to remember the following crucial points when you are ending the contract:
Confidentiality and non-disclosure stipulations Zenith Financial Network Inc are applicable after completion of the contract with the debt collection agency as well as its workers. The debt collector returns all documents associated with your organisation and destroys all info related to your organisation 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 help with faster debt collection. Setting up procedures is a very essential action in dealing with the collection agency. The collection agency may use one or more of its involved firms to get information about defaulting clients. In debt collection practices, the timing of interaction is exceptionally important and hence it will go a long method in choosing the success of your debt collection process. If it doesn't, then you require to move all your debt collection processes from the agency.