Choosing a credit debt collector is perhaps the most hard and important task. Some elements you should think about while picking a debt collection agency are:
- Experience and specialists
- Geographical existence
- Proficiency
- Fees and charging model
- Client referrals
- Collection Agency Services has covered this topic in depth through different complimentary collections reports and posts on this website.
Action II - Hiring the Collection Agency and Setting Up Processes
When you choose the debt 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 properly. Simply make certain 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 receivable, consumer contacts, product or services rates, and so on to assist in faster debt collection. You wish to make sure that this info does not fall in the wrong hands.
Establishing procedures is a crucial step in handling the debt collector. The success or failure of your collaboration will depend a lot on how distinct your processes are and how strictly they are followed. Essential processes you need to specify are:
Internal procedures: You need to put in place a clear process on defining bad debt and referring the case to the collection agency. You do not wish to refer the case to the collection agency before you make a sincere effort to collect the dues internally.
Details transfer: How will you move the info to the debt collection agency about your dues and defaulting customers, and how will you get the details from your debt collection agency? Debt collection software can make the information transfer procedure simple and secured.
3rd party dealing: As pointed out previously, 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 Zenith Financial Network its associated agencies to obtain info about defaulting clients. Hence you have to set up a clear protocol on what does it cost? details they can share with such third parties.
Communication: You have to establish single point contacts for communication within the business and the collection agency. In debt collection practices, the timing of communication is exceptionally crucial and thus it will go a long way in deciding the success of your debt collection procedure. Again, the value of debt collection software application can not be overemphasized here.
Action III - Performance 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 an ongoing procedure. Essential parameters to keep an eye on are:
Quantitative
- Number of cases described the credit debt collection agency and percentage of cases effectively solved by them.
- Portion of debt recovered by the collection agency from all cases referred.
- Portion of debt recovered by the debt collector 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 collector followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the debt collector 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 need to move all your debt collection processes from the agency. You must remember the following essential points when you are ending the agreement:
Confidentiality and non-disclosure provisions apply even after the end of the agreement with the debt collection agency along with its employees. The debt collection agency returns all files related to your service and damages all information related to your service 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 rates, 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.
