Step I - Choosing A Debt Collection Agency
Picking a credit debt collection agency is possibly the most challenging and crucial job. Some factors you should consider while choosing a debt collector are:
- Experience and professionals
- Geographical presence
- 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 Establishing Procedures
When you choose the debt collector, 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 interact with the agency.
An agreement is the legal file and your legal experts will, of course, prepare it correctly. Simply make sure that you include important clauses such as confidentiality and non-disclosure. You are likely to pass sensitive information to the collection agency such as your account receivables, customer 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 procedures you need to define are:
Internal procedures: You have to put in place a clear procedure on defining uncollectable bill and referring the case to the collection agency. You do not want to refer the case to the collection agency prior to you make a sincere effort to collect the charges internally.
Info transfer: How will you move the information to the debt collector about your dues and defaulting clients, and how will you get the info from your debt collector? Debt collection software application can make the info transfer procedure easy and protected.
3rd party dealing: As mentioned previously, it is very important for you to ensure the security of the details you offer to the collection agency. The debt collector might use one or more of its involved companies to get details about defaulting clients. Thus you have to establish a clear procedure on just how much info they can show such third parties.
Interaction: You need to establish single point contacts for communication within the company and the collection agency. In debt collection practices, the timing of interaction is very crucial 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 overstated here.
Step III - Performance Monitoring
As soon as all processes are set, begin keeping an eye on the performance of the collection agency. When dealing with a collection agency, this is an ongoing procedure. Essential criteria to keep track of are:
- Variety of cases described the credit collection agency and portion of cases successfully fixed by them.
- Percentage of debt recuperated by the debt collection agency from all cases referred.
- Percentage of debt recuperated by the debt collection agency from fixed cases.
- Percentage of quantity paid as fees/commission to the collection agency to the total uncollectable bill cases described them.
- Average number of days taken by the collection agency for full/partial credit collection.
* How well do the debt collector professionals handle your consumers?
* Has the debt collection agency followed all legal requirements mentioned 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 picked debt collection agency will work best for you. If it does not, then you need to move all your debt collection processes from the agency. You need to keep in mind the following crucial points when you are ending the contract:
Confidentiality and non-disclosure stipulations are applicable after the end of the agreement with the collection agency along with its employees. The debt collection agency returns all files related to your service and ruins all details related to your business 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, and so on to help with faster debt collection. Setting up procedures is a very essential step in dealing with the collection agency. 888-591-3861 The collection agency might utilize one or more of its associated companies to get details about defaulting consumers. In debt collection practices, the timing of communication is extremely crucial and hence it will go a long way in choosing the success of your debt collection procedure. If it doesn't, then you need to transfer all your debt collection procedures from the agency.