Picking a credit collection agency is perhaps the most essential and hard task. Some factors you need to consider while selecting a debt collection agency are:
- Experience and specialists
- Geographical existence
- Proficiency
- Charges and charging model
- Client referrals
- Debt Collector Services has covered this topic in depth through different totally free collections reports and posts on this website.
Action II - Working With the Collection Agency and Setting Up Processes
Once you select the debt collection agency, the first two 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 information to the collection agency such as your account receivables, client contacts, product and services pricing, etc. to facilitate faster debt collection. You want to be sure that this information does not fall in the incorrect hands.
Setting up processes is a very important 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 have to put in place a clear process 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 genuine effort to collect the fees internally.
Information transfer: How will you transfer the details to the debt collector about your charges and defaulting customers, and how will you receive the information from your collection agency? Debt collection software can make the details transfer procedure easy and secured.
Third party dealing: As pointed out previously, it is essential for you to guarantee the security of the information you give to the debt collector. The debt collection agency may use several of its involved companies to get details about defaulting clients. Thus you need to establish a clear protocol on how much details they can show such third parties.
Communication: You need to establish single point contacts for communication within the collection and the business agency. 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 procedure. Again, the importance of debt collection software application can not be overemphasized here.
Action III - Efficiency Tracking
When all processes are set, begin keeping track of the performance of the debt collector. This is an ongoing procedure when handling a collection agency. Essential criteria to keep track of are:
Quantitative
- Number of cases described the credit collection agency and portion of cases successfully fixed by them.
- Portion of debt recovered 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 total 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 discussed in the Fair Debt Collection Practices Act?
* Has the collection agency surpassed the provisions of the Fair Debt Collection Practices Act?
* Has the debt collector followed all processes and guidelines set by you?
Action IV - Contract Closure
Ideally, the selected debt collection agency will Zenith Financial Network work best for you. If it doesn't, then you need to move all your debt collection processes from the agency. You must keep in mind 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 info related to your organisation from their data storage.
You are likely to pass sensitive details to the collection agency such as your account receivables, customer contacts, product and services rates, etc. to help with 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 important and hence it will go a long method in choosing the success of your debt collection process. If it doesn't, then you need to move all your debt collection procedures from the agency.
