Step I - Picking A Debt Collection Agency
Selecting a credit debt collector is perhaps the most hard and important task. Some aspects you must consider while choosing a debt collection agency are:
- Experience and specialists
- Geographical presence
- Costs and charging model
- Customer recommendations
- Debt Collection Agency Provider has covered this topic in depth through different complimentary collections reports and posts on this website.
Step II - Hiring the Debt Collector and Establishing Processes
Once you select 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 delicate information to the collection agency such as your account receivables, customer 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.
Establishing 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. Crucial 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 collection agency. You do not wish to refer the case to the collection agency before you make a genuine effort to collect the fees internally.
Info transfer: How will you move the details to the collection agency about your charges and defaulting customers, and how will you receive the info from your debt collection agency? Debt collection software can make the information transfer procedure simple and protected.
Third party dealing: As discussed previously, it is crucial for you to ensure the security of the information you give to the debt collector. The collection agency may use one or more of its involved companies to obtain details about defaulting consumers. For this reason you have to set up a clear procedure on what does it cost? details they can show such 3rd parties.
Communication: You have to set up single point contacts for communication within the company and the collection agency. In debt collection practices, the timing of communication is extremely important and hence it will go a long way in deciding the success of your debt collection procedure. Again, the importance of debt collection software can not be overstated here.
Action III - Efficiency Tracking
Once all procedures are set, begin keeping track of the efficiency of the debt collector. When dealing with a collection agency, this is an ongoing process. Important criteria to monitor are:
- Number of cases referred to the credit debt collector and percentage of cases effectively resolved by them.
- Portion of debt recuperated by the debt collection agency from all cases referred.
- Portion of debt recovered by the debt collection agency from solved cases.
- Portion of quantity paid as fees/commission to the collection agency to the total uncollectable bill cases referred to them.
- Typical number of days taken by the debt collection agency for full/partial credit collection.
* How well do the collection agency experts deal with your clients?
* Has Zenith Financial Network the collection agency followed all legal requirements discussed in the Fair Debt Collection Practices Act?
* Has the collection agency exceeded the provisions of the Fair Debt Collection Practices Act?
* Has the debt collection agency followed all processes and guidelines set by you?
Action IV - Contract Closure
Hopefully, the picked collection agency will work best for you. If it does not, then you require to transfer all your debt collection procedures from the agency. You should keep in mind the following crucial points when you are ending the contract:
Privacy and non-disclosure clauses 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 procedures 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 exceptionally important and thus it will go a long method in choosing the success of your debt collection process. If it doesn't, then you require to move all your debt collection procedures from the agency.
Step I - Picking A Debt Collection Agency