Choosing a credit debt collection agency is maybe the most hard and important task. Some elements you need to think about while selecting a debt collection agency are:
- Experience and experts
- Geographical existence
- Know-how
- Fees and charging model
- Client recommendations
- Debt Collector Provider has covered this topic in depth through different totally free collections reports and short articles on this website.
Action II - Working With the Debt Collector and Setting Up Processes
Once you select the debt collection agency, the first two steps you have to take are:
Enter into an agreement with the agency;
Establish procedures on how you are going to interact with the agency.
You are likely to pass sensitive information to the collection agency such as your account receivables, consumer contacts, item and services rates, and so on to assist in faster debt collection. You desire to be sure that this info does not fall in the wrong hands.
Setting up processes is an extremely important step in dealing with the collection agency. The success or failure of your partnership will depend a lot on how distinct your procedures are and how strictly they are followed. Essential procedures you need to define are:
Internal processes: You need 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 prior to 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 protected.
3rd party dealing: As discussed earlier, it is very important for you to ensure the security of the details you offer to the debt collection agency. The collection agency may utilize one or more of its associated firms to obtain info about defaulting customers. For this reason you have to set up a clear procedure on what does it cost? info they can share with such 3rd parties.
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 interaction is very essential and hence 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 - Performance Tracking
Once all procedures are set, begin monitoring the efficiency of the debt collection agency. When dealing with a collection agency, this is a continuous process. Important criteria to keep track of are:
Quantitative
- Variety of cases referred to 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.
- Portion of debt recovered by the debt collector from resolved cases.
- Portion of quantity paid as fees/commission to the collection agency to the overall bad debt cases described them.
- Average variety of days taken by the collection agency for full/partial credit collection.
Qualitative
* How well do the debt collector 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 arrangements of the Fair Debt Collection Practices Act?
* Has the collection agency followed all procedures and guidelines set by you?
Step IV - Agreement Closure
Hopefully, the chosen collection agency will work best for you. But if it does not, then you need to move all your debt collection processes from the agency. You should remember the following crucial points when you are ending the contract:
Privacy and Zenith Financial Network Inc non-disclosure stipulations are applicable after the end of the contract with the debt collector as well as its workers. The debt collector returns all documents associated with your business and ruins all details related to your business from their data storage.
You are most likely to pass delicate information to the collection agency such as your account receivables, client contacts, item and services pricing, etc. to assist in faster debt collection. Setting up processes is a very essential action in dealing with the collection agency. The collection agency may use one or more of its involved firms to get information about defaulting clients. In debt collection practices, the timing of interaction is extremely important and thus it will go a long method in deciding the success of your debt collection process. If it doesn't, then you require to move all your debt collection processes from the agency.