Picking a credit collection agency is possibly the most essential and hard task. Some elements you need to think about while selecting a collection agency are:
- Experience and experts
- Geographical existence
- Know-how
- Fees and charging model
- Client recommendations
- Debt Collection Agency Provider has covered this subject in depth through various free collections reports and short articles on this site.
Action II - Employing the Debt Collector and Establishing Procedures
Once you choose the debt collection agency, the first 2 actions you need to take are:
Enter into a contract with the agency;
Set up procedures on how you are going to communicate with the agency.
A contract is the legal document and your legal experts will, of course, prepare it correctly. Just make sure that you include important provisions such as confidentiality and non-disclosure. You are likely to pass sensitive information 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 want to make sure that this info does not fall in the incorrect hands.
Setting up processes is an extremely important step in dealing with the 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 need to define 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 wish to refer the case to the collection agency prior to you make a genuine effort to collect the dues internally.
Information 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 mentioned earlier, it is extremely important for you to ensure the security of the information you provide to the debt collector. The debt collection agency may utilize several of its associated agencies to obtain details about defaulting clients. Hence you have to establish a clear protocol on how much details they can share with such third parties.
Interaction: You need to set up 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 choosing the success of your debt collection process. Once again, the significance of debt collection software can not be overstated here.
Action III - Performance Tracking
When all processes are set, begin monitoring the efficiency of the debt collection agency. When dealing with a collection agency, this is an ongoing process. Essential parameters to keep an eye on are:
Quantitative
- Variety of cases referred to the credit debt collector and percentage of cases effectively resolved by them.
- Portion of debt recovered by the debt collector from all cases referred.
- Portion of debt recovered by the debt collection agency from solved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall 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 collection agency followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the debt collection agency gone beyond the arrangements of the Fair Debt Collection Practices Act?
* Has the collection agency followed all procedures and standards set by you?
Step IV - Agreement Closure
Ideally, the chosen 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 must remember the following essential Zenith Financial Network 888-591-3861 points when you are ending the agreement:
Confidentiality and non-disclosure provisions apply even after completion of the agreement with the debt collection agency as well as its workers. The collection agency returns all documents connected to your business and ruins all details related to your business from their data storage.
You are most likely to pass sensitive info to the collection agency such as your account receivables, consumer contacts, item and services pricing, and so on to facilitate faster debt collection. Setting up procedures is a really essential step in dealing with the collection agency. The collection agency may utilize one or more of its involved agencies to get info about defaulting consumers. In debt collection practices, the timing of communication is incredibly essential and for this reason it will go a long way in deciding the success of your debt collection procedure. If it does not, then you require to transfer all your debt collection processes from the agency.
