Dealing With A Collection Agency

Step I - Picking A Collection Agency

Picking a credit debt collector is maybe the most challenging and essential task. Some elements you must think about while picking a debt collector are:

- Experience and professionals

- Geographical presence

- Competence

- Charges and charging model

- Customer references

- Collection Agency Solutions has covered this subject in depth through various free collections reports and short articles on this website.

Action II - Hiring the Debt Collection Agency and Establishing Processes

When you choose the debt collection agency, the very first two actions you have to take are:

Enter into a contract with the agency;

Set up procedures on how you are going to interact with the agency.

A contract is the legal document and your legal experts will, of course, prepare it correctly. Just ensure that you consist of crucial clauses such as confidentiality and non-disclosure. You are most likely to pass sensitive info to the collection agency such as your account receivables, client contacts, product or services pricing, etc. to facilitate faster debt collection. You wish to be sure that this info does not fall in the incorrect hands.

Establishing procedures is an essential step in dealing with the debt collector. The success or failure of your partnership will depend a lot on how distinct your procedures are and how strictly they are followed. Essential processes you need to define are:

Internal processes: You have to put in place a clear process on defining bad debt and referring the case to the debt collection agency. You do not wish to refer the case to the collection agency prior to you make a sincere effort to gather the fees internally.

Info transfer: How will you transfer the info to the debt collection agency about your dues and defaulting consumers, and how will you get the info from your collection agency? Debt collection software can make the details transfer procedure simple and protected.

3rd party dealing: As mentioned earlier, it is extremely important for you to guarantee the security of the details you give to the collection agency. The collection agency may use one or more of its associated agencies to get information about defaulting consumers. For this reason you have to set up a clear procedure on what does it cost? info they can share with such 3rd parties.

Communication: You have to establish single point contacts for communication within the collection and the company agency. In debt collection practices, the timing of communication is extremely important and for this reason it will go a long way in choosing the success of your debt collection process. Once again, the value of debt collection software can not be overemphasized here.

Action III - Efficiency Tracking

As soon as all procedures are set, start keeping an eye on the performance of the debt collection agency. This is an ongoing process when handling a collection agency. Essential parameters to keep an eye on are:

Quantitative

- Number of cases referred to the credit debt collector and portion of cases successfully resolved by them.

- Portion of debt recuperated by the collection agency from all cases referred.

- Portion of debt recuperated by the debt collection agency from fixed cases.

- Percentage 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 debt collection agency for full/partial credit collection.

Qualitative

* How well do the debt collector professionals deal with your consumers?

* Has the collection agency followed all legal requirements pointed out in the Fair Debt Collection Practices Act?

* Has the collection agency exceeded the arrangements of the Fair Debt Collection Practices Act?

* Has the debt collection agency followed all procedures and standards set by you?

Step IV - Contract Closure

Hopefully, the chosen debt collector will work best for you. If it doesn't, then you require to move all your debt collection procedures from the agency. You ought to keep in mind the following essential points when you are ending the agreement:

Privacy and non-disclosure clauses apply after completion of the contract with the collection agency as well as its workers. The debt collection agency returns all files connected to your organisation and destroys all information related to your company from their information storage.


You are likely to pass sensitive info to the collection agency such as your account receivables, consumer contacts, Zenith Financial Network product and services prices, and so on to help with faster debt collection. Setting up procedures is a really important step in dealing with the collection agency. The collection agency may use one or more of its associated agencies to get information about defaulting customers. In debt collection practices, the timing of communication is extremely important and hence it will go a long way in deciding the success of your debt collection process. If it doesn't, then you need to transfer all your debt collection procedures from the agency.

Leave a Reply

Your email address will not be published. Required fields are marked *