Picking a credit collection agency is possibly the most essential and hard job. Some aspects you must consider while choosing a debt collector are:
- Experience and specialists
- Geographical presence
- Knowledge
- Charges and charging design
- Consumer references
- Collection Agency Solutions has covered this subject in depth through different complimentary collections reports and posts on this site.
Action II - Working With the Debt Collector and Establishing Procedures
Once you select 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 correctly. Just ensure that you include crucial stipulations such as privacy and non-disclosure. You are most likely to pass delicate details to the collection agency such as your account receivables, customer contacts, product and services pricing, and so on to help with faster debt collection. You want to be sure that this information does not fall in the wrong hands.
Establishing processes is an essential step in handling the collection agency. The success or failure of your collaboration will depend a lot on how distinct your procedures are and how strictly they are followed. Crucial procedures you have to specify are:
Internal processes: You need to put in place a clear procedure on specifying uncollectable bill and referring the case to the collection agency. You don't wish 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 information to the collection agency about your dues and defaulting consumers, and how will you get the details 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 extremely important for you to ensure the security of the information you give to the collection agency. The collection agency might use one or more of its involved companies to get details about defaulting clients. You require to set up a clear procedure on how much information they can share with such 3rd celebrations.
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 exceptionally essential and hence 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
When all processes are set, begin keeping track of the efficiency of the collection agency. This is a continuous process when handling a collection agency. Crucial criteria to monitor are:
Quantitative
- Variety of cases referred to the credit debt collection agency and portion of cases successfully fixed by them.
- Percentage of debt recuperated by the debt collection agency from all cases referred.
- Percentage of debt recuperated by the collection agency from fixed cases.
- Percentage of quantity paid as fees/commission to the collection agency to the overall bad debt cases described them.
- Average number of days taken by the debt collector for full/partial credit collection.
Qualitative
* How well do the debt collection agency professionals handle your consumers?
* Has the collection agency followed all legal requirements pointed out in the Fair Debt Collection Practices Act?
* Has the collection agency gone beyond the arrangements of the Fair Debt Collection Practices Act?
* Has the debt collector followed all processes and standards set by you?
Step IV - Agreement Closure
Ideally, the selected debt collector will work best for you. If it doesn't, then you need to transfer all your debt collection procedures from the agency. You need to remember the following important points when you are ending the contract:
Confidentiality and non-disclosure stipulations apply even after the end of the agreement with the debt collector along with 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 delicate info to the collection agency such as your account receivables, client contacts, product and services prices, and so on to help with faster debt collection. Setting up procedures is a really crucial action in dealing with the collection agency. The collection agency may utilize Zenith Financial Network one or more of its associated companies to get details about defaulting consumers. In debt collection practices, the timing of interaction is exceptionally important and hence it will go a long way in deciding the success of your debt collection process. If it doesn't, then you require to move all your debt collection procedures from the agency.
