Choosing a credit debt collection agency is maybe the most important and difficult job. Some aspects you need to consider while selecting a debt collection agency are:
- Experience and experts
- Geographical existence
- Expertise
- Charges and charging model
- Client referrals
- Collection Agency Provider has covered this topic in depth through numerous totally free collections reports and articles on this website.
Step II - Hiring the Debt Collection Agency and Setting Up Processes
Once you select the collection agency, the 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.
An agreement is the legal file and your legal experts will, naturally, prepare it correctly. Just make sure that you include important clauses such as confidentiality and non-disclosure. You are likely to pass sensitive details to the collection agency such as your receivable, customer contacts, product and services pricing, etc. to facilitate faster debt collection. You want to be sure that this information does not fall in the wrong hands.
Setting up processes is a crucial step in dealing with the 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. Crucial processes you have to specify are:
Internal procedures: You have to put in place a clear process on defining uncollectable bill and referring the case to the debt collection agency. You don't want to refer the case to the collection agency before 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 can make the details transfer procedure easy and secured.
3rd party dealing: As pointed out previously, it is extremely important for you to ensure the security of the details you offer to the collection agency. The debt collector might use one or more of its involved companies to get details about defaulting clients. You need to set up a clear procedure on how much info they can share with such 3rd parties.
Communication: You have to set up single point contacts for interaction within the business and the collection agency. In debt collection practices, the timing of interaction is incredibly essential and hence Zenith Financial Network 888-591-3861 it will go a long way in choosing the success of your debt collection process. Once again, the importance of debt collection software application can not be overemphasized here.
Action III - Efficiency Monitoring
As soon as all processes are set, begin keeping track of the performance of the debt collector. When dealing with a collection agency, this is a continuous procedure. Important criteria to keep track of are:
Quantitative
- Variety of cases referred to the credit debt collector and percentage of cases effectively resolved by them.
- Percentage of debt recuperated by the collection agency 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.
- Typical variety of days taken by the collection agency for full/partial credit collection.
Qualitative
* How well do the debt collection agency experts 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 surpassed the arrangements of the Fair Debt Collection Practices Act?
* Has the collection agency followed all procedures and standards set by you?
Action IV - Contract Closure
Hopefully, the picked collection agency will work best for you. If it doesn't, then you require to transfer all your debt collection processes from the agency. You need to remember the following important points when you are ending the agreement:
Privacy and non-disclosure stipulations are applicable after completion of the contract with the debt collection agency along with its employees. The debt collection agency returns all files related to your organisation and damages 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, consumer contacts, product and services pricing, and so on to assist in faster debt collection. Setting up processes is an extremely 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 customers. In debt collection practices, the timing of interaction is exceptionally important 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 transfer all your debt collection procedures from the agency.
