Step I - Selecting A Collection Agency
Picking a credit collection agency is possibly the most crucial and challenging task. Some factors you should consider while choosing a debt collection agency are:
- Experience and experts
- Geographical existence
- Fees and charging model
- Customer recommendations
- Debt Collection Agency Provider has covered this topic in depth through numerous complimentary collections reports and posts on this website.
Action II - Working With the Debt Collection Agency and Setting Up Processes
Once you select the debt collector, the very first 2 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 likely to pass sensitive details to the collection agency such as your account receivables, client contacts, product and services rates, and so on to facilitate faster debt collection. You want to be sure that this information does not fall in the incorrect hands.
Setting up procedures is a crucial step in dealing with the 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. Crucial processes you have to define are:
Internal procedures: You have to put in place a clear procedure on specifying bad debt 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 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 info from your debt collection agency? Debt collection software can make the information transfer procedure easy and protected.
Third party dealing: As mentioned previously, it is crucial for you to make sure the security of the info you give to the collection agency. The debt collector may use several of its involved agencies to get details about defaulting clients. Hence you have to establish a clear protocol on what does it cost? info they can share with such 3rd parties.
Communication: 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
When all processes are set, begin monitoring the efficiency of the debt collection agency. This is an ongoing procedure when dealing with a collection agency. Crucial specifications to monitor 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 collection agency from fixed cases.
- Percentage 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.
* How well do the debt collector experts handle your customers?
* Has the collection agency followed all legal requirements pointed out in the Fair Debt Collection Practices Act?
* Has the debt collector exceeded the arrangements of the Fair Debt Collection Practices Act?
* Has the debt collection agency followed all procedures and standards set by you?
Step IV - Contract Closure
Ideally, the picked debt collection agency will work best for you. If it doesn't, then you require to transfer all your debt collection procedures from the agency. You need to keep in mind the following important points when you are ending the agreement:
Confidentiality and non-disclosure provisions 888-591-3861 apply even after completion of the contract with the debt collection agency along with its employees. The debt collection agency returns all files related to your service 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, item and services rates, etc. to help with faster debt collection. Setting up procedures is a really important action in dealing with the collection agency. The collection agency might use one or more of its associated companies to get details about defaulting customers. In debt collection practices, the timing of communication is very crucial and hence it will go a long way in choosing the success of your debt collection procedure. If it doesn't, then you require to transfer all your debt collection processes from the agency.