Step I - Choosing A Debt Collector
Selecting a credit debt collection agency is maybe the most tough and crucial task. Some factors you should think about while picking a collection agency are:
- Experience and professionals
- Geographical presence
- Costs and charging design
- Customer references
- Debt Collection Agency Solutions has actually covered this subject in depth through numerous free collections reports and articles on this site.
Step II - Employing the Debt Collection Agency and Establishing Procedures
As soon as you pick the debt collector, the first two 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 most likely to pass delicate info to the collection agency such as your account receivables, client contacts, item and services prices, etc. to facilitate faster debt collection. You want to be sure that this information does not fall in the wrong hands.
Establishing procedures is a crucial step in handling the debt collector. 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 defining uncollectable bill and referring the case to the debt collector. You do not wish to refer the case to the collection agency before you make a sincere effort to collect the charges internally.
Details transfer: How will you move the info to the collection agency about your dues and defaulting consumers, and how will you get the info from your debt collection agency? Debt collection software can make the details transfer procedure simple 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 use several of its involved companies to get details about defaulting clients. Thus you need to establish a clear protocol on how much details they can show such third parties.
Communication: You need to establish single point contacts for interaction within the company and the collection agency. In debt collection practices, the timing of interaction is incredibly crucial and thus it will go a long way in deciding the success of your debt collection procedure. Once again, the importance of debt collection software application can not be overemphasized here.
Step III - Efficiency Monitoring
Once all procedures are set, start keeping an eye on the efficiency of the debt collection agency. This is an ongoing procedure when dealing with a collection agency. Important criteria to keep track of are:
- 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.
- Percentage of debt recovered by the debt collection agency from fixed cases.
- Percentage of amount paid as fees/commission to the collection agency to the overall uncollectable bill cases described them.
- Average number of days taken by the collection agency for full/partial credit collection.
* How well do the collection agency experts handle your customers?
* Has the debt collector followed all legal requirements discussed 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 collection agency followed all processes and standards set by you?
Action IV - Contract Closure
Ideally, the picked collection agency will work best for you. However if it doesn't, then you need to move all your debt collection processes from the agency. You must remember the following important points when you are ending the agreement:
Confidentiality and non-disclosure stipulations apply after completion of the agreement with the collection agency as well as its staff members. The debt collection agency returns all documents connected to your service and ruins all info related to your business from their information storage.
You are most likely to pass sensitive information to the collection agency such as your account receivables, customer contacts, product and services rates, etc. to facilitate faster debt collection. Setting up Zenith Financial Network processes is an extremely crucial step in dealing with the collection agency. The collection agency might utilize one or more of its involved companies to get info about defaulting consumers. In debt collection practices, the timing of interaction is extremely crucial and for this reason 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.
Step I - Choosing A Debt Collector