Step I - Picking A Collection Agency
Choosing a credit collection agency is perhaps the most crucial and difficult job. Some factors you must consider while choosing a debt collector are:
- Experience and professionals
- Geographical presence
- Costs and charging design
- Customer referrals
- Collection Agency Solutions has covered this topic 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 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 sensitive info to the collection agency such as your account receivables, customer contacts, product and services pricing, etc. to assist in faster debt collection. You desire to be sure that this details does not fall in the incorrect hands.
Establishing processes is an essential 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 define are:
Internal processes: You have 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 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 details from your debt collector? Debt collection software application can make the info transfer process simple and protected.
Third party dealing: As mentioned earlier, it is extremely important for you to ensure the security of the information you provide to the debt collection agency. The debt collection agency may utilize several of its associated firms to obtain info about defaulting customers. For this reason you have to set up a clear protocol on what does it cost? info they can share with such 3rd parties.
Interaction: You have to set up single point contacts for interaction within the collection and the company 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 significance of debt collection software can not be overstated here.
Step III - Efficiency Tracking
Once all procedures are set, start monitoring the efficiency of the debt collection agency. When dealing with a collection agency, this is a continuous process. Crucial specifications to keep an eye on are:
- Number of cases described the credit debt collection agency and percentage of cases effectively solved by them.
- Portion of debt recovered by the debt collector from all cases referred.
- Percentage of debt recuperated by the debt 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.
- Typical number of days taken by the debt collector for full/partial credit collection.
* How well do the debt collection agency professionals deal with your consumers?
* Has the debt collection agency followed all legal requirements pointed out in the Fair Debt Collection Practices Act?
* Has the debt collection agency gone beyond the provisions of the Fair Debt Collection Zenith Financial Network Practices Act?
* Has the debt collector followed all processes and standards set by you?
Step IV - Contract Closure
Ideally, the selected debt collector will work best for you. If it doesn't, 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 contract with the debt collection agency along with its employees. The debt collection agency returns all files associated with your service and destroys 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, customer contacts, product and services prices, and so on to facilitate 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 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 move all your debt collection procedures from the agency.
Step I - Picking A Collection Agency