Step I - Choosing A Debt Collection Agency
Picking a credit collection agency is possibly the most difficult and essential job. Some factors you should think about while picking a collection agency are:
- Experience and experts
- Geographical existence
- Fees and charging model
- Client recommendations
- Debt Collector Provider has actually covered this topic in depth through different totally free collections reports and posts on this website.
Action II - Working With the Collection Agency and Setting Up Processes
When you choose the collection agency, the first 2 actions you need to take are:
Enter into an agreement with the agency;
Establish procedures on how you are going to interact with the agency.
A contract is the legal document and your legal experts will, obviously, prepare it correctly. Just make sure that you include important clauses such as confidentiality and non-disclosure. You are most likely to pass delicate information to the collection agency such as your balance due, consumer contacts, product and services pricing, and so on to assist in faster debt collection. You want to make certain that this information does not fall in the wrong hands.
Setting up procedures is a crucial step in handling the collection agency. The success or failure of your collaboration will depend a lot on how distinct your procedures are and how strictly they are followed. Essential processes you need to define are:
Internal procedures: You need to put in place a clear procedure on defining bad debt and referring the case to the collection agency. You do not wish to refer the case to the collection agency prior to you make a sincere effort to collect the dues internally.
Information transfer: How will you move the details to the debt collection agency about your fees and defaulting customers, and how will you get the details from your debt collection agency? Debt collection software can make the information transfer procedure simple and secured.
Third party dealing: As pointed out previously, it is essential for you to guarantee the security of the information you provide to the debt collector. The debt collection agency may utilize several of its associated agencies to obtain details about defaulting clients. You require to set up a clear procedure on how much information they can share with such 3rd celebrations.
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 incredibly important and hence it will go a long way in choosing the success of your debt collection Zenith Financial Network process. Again, the value of debt collection software can not be overemphasized here.
Action III - Performance Tracking
When all processes are set, begin keeping track of the performance of the debt collector. When dealing with a collection agency, this is an ongoing procedure. Essential criteria to keep track of are:
- Number of cases described 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 recuperated by the collection agency from resolved cases.
- Percentage 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 collection agency for full/partial credit collection.
* How well do the debt collector experts handle your customers?
* Has the debt collector followed all legal requirements discussed in the Fair Debt Collection Practices Act?
* Has the debt collector exceeded the arrangements of the Fair Debt Collection Practices Act?
* Has the collection agency followed all standards and procedures set by you?
Action IV - Agreement Closure
Hopefully, the chosen debt collector will work best for you. But if it does not, then you have to transfer all your debt collection processes from the agency. You need to remember the following essential points when you are ending the contract:
Confidentiality and non-disclosure stipulations are applicable after completion of the contract with the debt collection agency along with its employees. The debt collector returns all files associated with your organisation and destroys all info related to your service from their data storage.
You are most likely to pass sensitive info to the collection agency such as your account receivables, consumer contacts, product 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 associated 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.