Picking a credit collection agency is maybe the most crucial and difficult task. Some aspects you need to think about while picking a collection agency are:
- Experience and professionals
- Geographical presence
- Knowledge
- Costs and charging design
- Consumer references
- Collection Agency Services has covered this topic in depth through different free collections reports and articles on this site.
Step II - Hiring the Debt Collection Agency and Setting Up Processes
As soon as you pick the debt collector, the very first 2 actions 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 make certain that you include essential 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 and services pricing, and so on to assist in faster debt collection. You wish to make certain that this details does not fall in the incorrect hands.
Setting up processes is a very important step in dealing with the collection agency. The success or failure of your collaboration will depend a lot on how distinct your processes are and how strictly they are followed. Important procedures you need to specify are:
Internal procedures: You have to put in place a clear procedure on defining bad debt and referring the case to the debt collection agency. You do not want to refer the case to the collection agency before you make a sincere effort to collect the dues internally.
Info transfer: How will you transfer the information to the collection agency about your charges and defaulting consumers, and how will you receive the info from your debt collector? Debt collection software can make the details transfer procedure simple and protected.
Third party dealing: As mentioned previously, 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 info about defaulting customers. For this reason you have to set up a clear protocol on what does it cost? info they can share with such 3rd parties.
Interaction: You have to set up single point contacts for interaction within the collection and the company agency. In debt collection practices, the timing of interaction is very essential and hence it will go a long way in choosing the success of your debt collection procedure. Once again, the significance of debt collection software can Zenith Financial Network 888-591-3861 not be overstated here.
Step III - Efficiency Tracking
Once all procedures are set, start keeping track of the performance of the collection agency. When dealing with a collection agency, this is a continuous process. Essential specifications to keep an eye on are:
Quantitative
- Number of cases described the credit debt collection agency and portion of cases successfully fixed by them.
- Portion of debt recuperated by the collection agency from all cases referred.
- Portion of debt recovered by the debt collector from resolved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall uncollectable bill cases referred to them.
- Typical number of days taken by the debt collector for full/partial credit collection.
Qualitative
* How well do the debt collection agency professionals 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 provisions 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 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 points when you are ending the agreement:
Confidentiality and non-disclosure provisions apply even after completion 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 delicate details to the collection agency such as your account receivables, customer contacts, product and services rates, 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 info about defaulting clients. In debt collection practices, the timing of interaction is extremely essential and for this reason 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.
