Picking a credit collection agency is perhaps the most challenging and essential job. Some aspects you must consider while choosing a collection agency are:
- Experience and experts
- Geographical existence
- Expertise
- Fees and charging model
- Client referrals
- Debt Collector Provider has covered this topic in depth through various complimentary collections reports and posts on this website.
Action II - Hiring the Collection Agency and Setting Up Processes
Once you choose the debt 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.
You are most likely to pass delicate details to the collection agency such as your account receivables, consumer contacts, item and services prices, and so on to help with faster debt collection. You desire to be sure that this info does not fall in the wrong hands.
Setting up processes is a very important step in dealing with the collection agency. The success or failure of your partnership will depend a lot on how well-defined your procedures are and how strictly they are followed. Crucial procedures you need to define are:
Internal processes: You have to put in place a clear procedure on specifying 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 sincere effort to gather the charges internally.
Info transfer: How will you transfer the information to the collection agency about your charges and defaulting consumers, and how will you get the info from your collection agency? Debt collection software application can make the details transfer procedure easy and secured.
3rd party dealing: As discussed earlier, it is extremely important for you to ensure the security of the information you provide to the debt collector. The debt collection agency may use several of its associated agencies to obtain info about defaulting clients. Hence you have to establish a clear protocol on how much information 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 important and for this reason 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
Once all procedures are set, start monitoring the efficiency of the debt collection agency. When dealing with a collection agency, this is a continuous process. Crucial specifications to monitor 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 collector from solved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall bad debt cases described them.
- Typical number of days taken by the debt collector for full/partial credit collection.
Qualitative
* How well do the collection agency specialists deal Zenith Financial Network Inc with your consumers?
* Has the collection agency followed all legal requirements pointed out in the Fair Debt Collection Practices Act?
* Has the collection agency surpassed the provisions of the Fair Debt Collection Practices Act?
* Has the debt collection agency followed all standards and processes set by you?
Action IV - Contract Closure
Ideally, the picked collection agency will work best for you. However if it doesn't, then you have to move all your debt collection processes from the agency. You should remember the following crucial points when you are ending the contract:
Confidentiality and non-disclosure stipulations are applicable even after completion of the contract with the debt collection agency along with its employees. The debt collector returns all files associated with your organisation and destroys all info related to your organisation from their data storage.
You are likely to pass delicate details to the collection agency such as your account receivables, customer contacts, product and services prices, and so on to facilitate faster debt collection. Setting up processes is a really crucial step in dealing with the collection agency. The collection agency may utilize one or more of its involved agencies to get information about defaulting clients. In debt collection practices, the timing of interaction is extremely essential and for this reason it will go a long method in choosing the success of your debt collection process. If it doesn't, then you require to move all your debt collection processes from the agency.