Picking a credit collection agency is possibly the most challenging and essential job. Some aspects you must consider while choosing a debt collector are:
- Experience and specialists
- Geographical presence
- Proficiency
- Costs and charging design
- Customer references
- Debt Collection Agency Provider has actually covered this subject in depth through numerous free collections reports and articles on this site.
Step II - Employing the Debt Collection Agency 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 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 balance due, consumer contacts, product and services pricing, etc. to facilitate faster debt collection. You want to make sure that this details does not fall in the incorrect hands.
Setting up procedures is a crucial step in handling the collection agency. The success or failure of your partnership will depend a lot on how well-defined your processes are and how strictly they are followed. Essential processes you need to specify are:
Internal procedures: 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 charges internally.
Details transfer: How will you transfer the details to the debt collection agency about your dues and defaulting customers, and how will you receive the information from your debt collector? Debt collection software application can make the info transfer process easy and secured.
Third party dealing: As mentioned earlier, it is very important for you to make sure the security of the info you provide to the debt collector. The collection agency might utilize one or more of its involved companies to get information about defaulting customers. Hence you have to establish a clear protocol on how much details they can show such third parties.
Interaction: You have to establish single point contacts for interaction within the business and the collection agency. In debt collection practices, the timing of communication is very essential and Zenith Financial Network 888-591-3861 thus it will go a long way in choosing the success of your debt collection procedure. Again, the importance of debt collection software application can not be overemphasized here.
Step III - Efficiency Monitoring
Once all procedures are set, begin keeping track of the efficiency of the debt collector. When dealing with a collection agency, this is an ongoing process. Essential criteria to keep track of are:
Quantitative
- Number of cases described the credit collection agency and portion of cases successfully solved by them.
- Portion of debt recovered by the collection agency from all cases referred.
- Percentage of debt recuperated by the debt collector from fixed cases.
- Portion of amount paid as fees/commission to the collection agency to the overall bad debt cases described them.
- Typical number of days taken by the debt collection agency for full/partial credit collection.
Qualitative
* How well do the collection agency specialists deal with your consumers?
* Has the debt collection agency followed all legal requirements discussed in the Fair Debt Collection Practices Act?
* Has the collection agency exceeded the provisions of the Fair Debt Collection Practices Act?
* Has the debt collection agency followed all processes and standards set by you?
Action IV - Agreement Closure
Ideally, the chosen debt collector will work best for you. But if it does not, then you have to transfer all your debt collection processes from the agency. You should keep in mind the following important points when you are ending the contract:
Privacy and non-disclosure clauses are applicable after the end of the agreement with the debt collector as well as its employees. The debt collection agency returns all files connected to your business and destroys all information related to your company from their information storage.
You are most likely to pass sensitive info to the collection agency such as your account receivables, client contacts, item and services pricing, etc. to assist in faster debt collection. Setting up processes is an extremely crucial step in dealing with the collection agency. The collection agency may utilize one or more of its involved agencies to get information about defaulting clients. In debt collection practices, the timing of interaction is extremely important and thus it will go a long way in deciding the success of your debt collection process. If it does not, then you require to transfer all your debt collection processes from the agency.
