Picking a credit debt collection agency is possibly the most crucial and difficult job. Some aspects you must consider while choosing a debt collection agency are:
- Experience and specialists
- Geographical existence
- Expertise
- Fees and charging design
- Consumer references
- Collection Agency Solutions has covered this subject in depth through different complimentary collections reports and posts on this website.
Step II - Hiring the Collection Agency and Setting Up Processes
Once you choose 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.
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 details does not fall in the incorrect hands.
Establishing procedures is a crucial step in handling the debt collection agency. The success or failure of your collaboration will depend a lot on how well-defined your processes are and how strictly they are followed. Important processes you have to specify are:
Internal procedures: 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 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 information from your collection agency? Debt collection software application can make the details transfer procedure easy and secured.
3rd party dealing: As pointed out previously, it is extremely important for you to ensure the security of the information you provide to the debt collection agency. The debt collection agency may utilize several of its associated agencies to obtain info about defaulting clients. You need to set up a clear procedure on how much info they can share with such third celebrations.
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 communication is very crucial and thus 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 overemphasized here.
Action III - Performance Monitoring
As soon as all procedures are set, start monitoring the efficiency of the debt collection agency. When dealing with a collection agency, this is an ongoing procedure. Crucial criteria to keep track of are:
Quantitative
- Number of cases described the credit debt collection agency and percentage of cases effectively solved by them.
- Portion of debt recuperated 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 described them.
- Average variety of days taken by the debt collection agency for full/partial credit collection.
Qualitative
* How well do the debt collection agency professionals handle your customers?
* Has the debt collector followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the debt collector gone beyond the provisions of the Fair Debt Collection Practices Act?
* Has the collection agency followed all standards and procedures set by you?
Step IV - Contract Closure
Ideally, the chosen debt collection agency will work best for you. But if it does not, then you need to transfer all your debt collection procedures from the agency. You ought to keep in mind the following crucial points when you are ending the contract:
Privacy and non-disclosure stipulations are applicable even after completion of the agreement with the debt collection agency in addition to its staff members. The debt collector returns all documents associated with your service and damages all details related to your Zenith Financial Network service from their information storage.
You are likely to pass sensitive information 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 an extremely essential step in dealing with the collection agency. The collection agency might utilize one or more of its involved firms to get details about defaulting consumers. In debt collection practices, the timing of interaction is extremely important and hence it will go a long method in choosing the success of your debt collection procedure. If it does not, then you require to transfer all your debt collection processes from the agency.