Choosing a credit collection agency is perhaps the most essential and hard job. Some aspects you need to consider while selecting a debt collection agency are:
- Experience and specialists
- Geographical existence
- Know-how
- Fees and charging model
- Client recommendations
- 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 Processes
Once you select the collection agency, the first two steps you have to take are:
Enter into 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, obviously, prepare it properly. Simply ensure that you consist of crucial stipulations such as privacy and non-disclosure. You are most likely to pass delicate details to the collection agency such as your receivable, consumer contacts, product or services rates, and so on to help with faster debt collection. You wish to make certain that this information does not fall in the wrong hands.
Setting up processes is a very important step in dealing with the debt collection agency. The success or failure of your collaboration will depend a lot on how well-defined your processes are and how strictly they are followed. Essential processes you have to specify are:
Internal processes: You need to put in place a clear procedure on specifying bad debt and referring the case to the debt collection agency. You don't want to refer the case to the collection agency prior to you make a genuine effort to gather the fees internally.
Information transfer: How will you transfer the details to the debt collector about your fees and defaulting clients, and how will you receive the information from your debt collector? Debt collection software application can make the info transfer process easy and protected.
3rd party dealing: As discussed earlier, it is crucial for you to make sure the security of the info you offer to the collection agency. The collection agency might use 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 information they can show such third 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 interaction is incredibly crucial and thus it will go a long way in deciding the success of your debt collection process. Again, the value of debt collection software can not be overstated here.
Action III - Performance Tracking
Once all procedures are set, begin keeping track of the performance of the debt collector. When dealing with a collection agency, this is a continuous process. Crucial criteria to keep an eye on are:
Quantitative
- Number of cases referred to the credit debt collection agency and percentage of cases effectively fixed by them.
- Percentage of debt recuperated by the debt collection Zenith Financial Network 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 total bad debt cases described them.
- Average variety of days taken by the collection agency for full/partial credit collection.
Qualitative
* How well do the debt collector professionals handle your customers?
* Has the debt collector followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the collection agency surpassed the provisions of the Fair Debt Collection Practices Act?
* Has the debt collector followed all processes and standards set by you?
Action IV - Contract Closure
Ideally, the selected debt collection agency will work best for you. If it does not, then you require to move all your debt collection processes from the agency. You need to remember the following essential points when you are ending the agreement:
Confidentiality and non-disclosure stipulations are applicable even after completion of the agreement with the collection agency in addition to its workers. The debt collector returns all documents connected to your business and ruins all information related to your organisation from their data storage.
You are likely to pass delicate information to the collection agency such as your account receivables, client contacts, product and services prices, and so on to facilitate faster debt collection. Setting up processes is a very essential action in dealing with the collection agency. The collection agency may use one or more of its associated firms to get information about defaulting customers. In debt collection practices, the timing of interaction is exceptionally important and thus 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 procedures from the agency.