Step I - Selecting A Collection Agency
Choosing a credit debt collector is perhaps the most essential and tough task. Some elements you need to think about while selecting a collection agency are:
- Experience and experts
- Geographical existence
- Fees and charging model
- Client recommendations
- Collection Agency Solutions has covered this topic in depth through various totally free collections reports and articles on this website.
Action II - Employing the Debt Collector and Establishing Procedures
As soon as you pick the collection agency, the first 2 actions you need to take are:
Participate in an agreement with the agency;
Set up processes on how you are going to interact with the agency.
You are likely to pass sensitive info to the collection agency such as your account receivables, consumer contacts, item and services pricing, etc. to facilitate faster debt collection. You desire to be sure that this details does not fall in the incorrect hands.
Setting up processes is a very important step in dealing with the collection agency. The success or failure of your partnership will depend a lot on how well-defined your processes are and how strictly they are followed. Important procedures you have to specify are:
Internal processes: You have to put in place a clear process on defining 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 charges internally.
Info transfer: How will you transfer the info to the debt collection agency about your fees and defaulting clients, and how will you receive the information from your collection agency? Debt collection software application can make the details transfer procedure easy and secured.
Third party dealing: As pointed out previously, it is extremely important for you to ensure the security of the information you provide to the debt collector. The debt collection agency may utilize several of its involved agencies to obtain info about defaulting clients. Hence you have to establish a clear protocol on how much details they can share with such 3rd parties.
Interaction: You have to set up single point contacts for interaction within the business and the collection agency. In debt collection practices, the timing of interaction is incredibly essential and thus it will go a long way in choosing the success of your debt collection procedure. Once again, the importance of debt collection software application can not be overemphasized here.
Action III - Efficiency Monitoring
Once all procedures are set, start monitoring the efficiency of the collection agency. When dealing with a collection agency, this is a continuous process. Crucial specifications to keep track of are:
- Variety of cases referred to the credit debt collector and portion of cases successfully resolved by them.
- Percentage of debt recuperated by the collection agency from all cases referred.
- Portion of debt recovered by the debt collection agency from resolved cases.
- Portion of quantity paid as fees/commission to the collection agency to the total bad debt cases described them.
- Average variety of days taken by the collection agency for full/partial credit collection.
* How well do the debt collection agency specialists deal with your clients?
* Has the debt collector 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 - Contract Closure
Ideally, the picked collection agency will work best for you. If it does not, then you need to transfer all your debt collection processes from the agency. You need to keep in mind the following important points when you are ending the agreement:
Privacy and non-disclosure clauses are applicable after completion of the contract with the debt collection agency along with its staff members. The collection agency returns all documents associated with your service and destroys all information related to your company from their information storage.
You are most likely to pass delicate details to the collection agency such as your account receivables, consumer contacts, Zenith Financial Network Inc item and services pricing, etc. to help with faster debt collection. Setting up procedures is a really crucial action in dealing with the collection agency. The collection agency might utilize one or more of its associated agencies to get information about defaulting consumers. In debt collection practices, the timing of communication is very crucial and hence it will go a long way in deciding the success of your debt collection process. If it doesn't, then you need to move all your debt collection procedures from the agency.