Step I - Selecting A Debt Collection Agency
Picking a credit collection agency is possibly the most crucial and difficult job. Some aspects you must consider while choosing a collection agency are:
- Experience and professionals
- Geographical existence
- Fees and charging model
- Client recommendations
- Debt Collector Provider has covered this topic in depth through various free collections reports and short articles on this website.
Action II - Working With the Debt Collector and Establishing Procedures
As soon as you select the debt collection agency, the very first 2 actions you need to take are:
Participate in an agreement with the agency;
Establish procedures on how you are going to communicate with the agency.
A contract is the legal document and your legal experts will, of course, prepare it correctly. Just make sure that you include important provisions such as confidentiality and non-disclosure. You are likely to pass sensitive info to the collection agency such as your balance due, client contacts, services and product prices, etc. to help with faster debt collection. You want to make sure that this info does not fall in the wrong hands.
Establishing processes is an extremely important step in dealing with the debt 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 have to define are:
Internal processes: You have to put in place a clear process on specifying uncollectable bill and referring the case to the debt collector. You do not want to refer the case to the collection agency before you make a genuine effort to gather the fees internally.
Info transfer: How will you transfer the information to the debt collector about your charges and defaulting clients, and how will you receive the information from your collection agency? Debt collection software application can make the details transfer process easy and secured.
3rd party dealing: As discussed earlier, it is very important for you to make sure the security of the details you offer to the collection agency. The collection agency might utilize one or more of its involved firms to get information about defaulting consumers. Thus you need to set up a clear procedure on just how much information they can show such 3rd parties.
Interaction: You need to establish single point contacts for interaction within the collection and the business agency. In debt collection practices, the timing of interaction is incredibly crucial and for this reason it will go a long way in deciding the success of your debt collection procedure. Once again, the importance of debt collection software application can not be overemphasized here.
Step III - Efficiency Monitoring
As soon as all procedures are set, start keeping an eye on the performance of the collection agency. This is a continuous process when handling a collection agency. Essential parameters to keep an eye on are:
- Number of cases described the credit debt collection agency and percentage of cases effectively solved by them.
- Portion of debt recovered by the debt collector from all cases referred.
- Percentage of debt recuperated by the debt collection agency from solved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall bad debt cases referred to them.
- Typical number of days taken by the debt collection agency for full/partial credit collection.
* How well do the collection agency experts deal with your clients?
* 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 collector followed all processes and standards set by you?
Action IV - Contract Closure
Ideally, the selected debt collection agency will work best for you. If it does not, then you need to move all your debt collection procedures from the agency. 888-591-3861 You ought to keep in mind the following important points when you are ending the agreement:
Privacy and non-disclosure clauses apply after the end of the agreement with the collection agency in addition to its staff members. The collection agency returns all files connected to your company and ruins all details related to your company from their information storage.
You are most likely to pass sensitive info to the collection agency such as your account receivables, consumer contacts, product and services prices, and so on to facilitate 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 consumers. In debt collection practices, the timing of communication is incredibly crucial and for this reason it will go a long way in deciding the success of your debt collection procedure. If it does not, then you need to transfer all your debt collection procedures from the agency.