Step I - Picking 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
- Debt Collector Provider has actually covered this topic in depth through various free collections reports and short articles on this site.
Step II - Employing the Debt Collection Agency and Establishing Procedures
As soon as you pick the 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 most likely to pass delicate details to the collection agency such as your account receivables, consumer contacts, item and services prices, etc. to help with 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 need to specify are:
Internal procedures: You need to put in place a clear process on defining bad debt 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 gather the charges internally.
Info transfer: How will you transfer the information to the collection agency about your charges and defaulting consumers, and how will you get the information from your collection agency? Debt collection software application can make the details transfer process easy and secured.
3rd party dealing: As discussed earlier, it is very important for you to make sure the security of the details you offer to the debt collection agency. The collection agency might utilize one or more of its associated firms to obtain information 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 need to set up single point contacts for interaction within the company and the collection agency. In debt collection practices, the timing of interaction is very important and for this reason 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 - Efficiency Tracking
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 monitor are:
- Variety of cases referred to the credit debt collector and percentage of cases effectively resolved by them.
- Portion of debt recovered by the Zenith Financial Network collection agency from all cases referred.
- Portion of debt recovered by the debt collector from solved cases.
- Portion of amount paid as fees/commission to the collection agency to the overall bad debt cases described them.
- Average variety of days taken by the debt collection agency for full/partial credit collection.
* How well do the debt collection agency professionals handle your customers?
* Has the debt collection agency followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the debt collection agency gone beyond the arrangements of the Fair Debt Collection Practices Act?
* Has the collection agency followed all processes and standards set by you?
Step IV - Agreement Closure
Ideally, the chosen debt collector will work best for you. But if it does not, then you need to transfer all your debt collection procedures from the agency. You must remember the following essential points when you are ending the agreement:
Confidentiality and non-disclosure stipulations are applicable even after completion of the contract with the debt collection agency along with its employees. The debt collection agency returns all files related to your service and destroys all info related to your organisation from their data storage.
You are likely to pass delicate details to the collection agency such as your account receivables, customer contacts, item and services rates, etc. to help with faster debt collection. Setting up procedures is a very essential action in dealing with the collection agency. The collection agency might use one or more of its associated companies to get details about defaulting customers. In debt collection practices, the timing of communication is exceptionally important and hence it will go a long method in choosing the success of your debt collection process. If it doesn't, then you need to move all your debt collection procedures from the agency.