Step I - Selecting A Debt Collection Agency
Choosing a credit debt collector is maybe the most crucial and hard job. Some factors you must think about while choosing a debt collector are:
- Experience and experts
- Geographical presence
- Fees and charging design
- Customer referrals
- Collection Agency Provider has actually covered this topic in depth through various free collections reports and posts on this website.
Step II - Hiring the Debt Collection Agency and Setting Up Processes
As soon as you select the debt collector, the very first two actions you have to take are:
Enter into an agreement with the agency;
Set up procedures on how you are going to communicate 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 rates, and so on to facilitate faster debt collection. You want to be sure that this information does not fall in the wrong hands.
Setting up 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 well-defined your processes are and how strictly they are followed. Important processes you need to define are:
Internal processes: You have to put in place a clear procedure on defining uncollectable bill and referring the case to the collection agency. You don't wish to refer the case to the collection agency prior to you make a sincere effort to gather the charges internally.
Info transfer: How will you transfer the information to the debt collection agency about your fees and defaulting customers, and how will you receive the information from your debt collector? Debt collection software application can make the info transfer process simple and protected.
Third party dealing: As mentioned earlier, it is extremely important for you to guarantee the security of the information Zenith Financial Network Inc you provide to the debt collection agency. The debt collector may utilize several of its involved firms to obtain information about defaulting customers. You need to set up a clear procedure on how much info they can share with such third parties.
Interaction: You have to set up single point contacts for communication within the collection and the company agency. In debt collection practices, the timing of interaction is very essential and hence it will go a long way in choosing the success of your debt collection process. Again, the value of debt collection software can not be overstated here.
Action III - Performance Tracking
When all processes are set, begin monitoring the efficiency of the debt collection agency. This is an ongoing process when handling a collection agency. Essential criteria to monitor are:
- Number of cases described the credit debt collector and portion of cases effectively fixed by them.
- Portion of debt recovered by the debt collector from all cases referred.
- Percentage of debt recuperated by the debt collection agency from solved cases.
- Percentage of quantity paid as fees/commission to the collection agency to the total bad debt cases referred to them.
- Typical number of days taken by the debt collector for full/partial credit collection.
* How well do the debt collection agency specialists deal with your customers?
* Has the debt collection agency followed all legal requirements discussed in the Fair Debt Collection Practices Act?
* Has the debt collection agency exceeded the provisions of the Fair Debt Collection Practices Act?
* Has the debt collector followed all guidelines and procedures set by you?
Action IV - Contract Closure
Ideally, the chosen collection agency will work best for you. If it doesn't, then you require to transfer all your debt collection procedures from the agency. You must remember the following crucial points when you are ending the contract:
Privacy and non-disclosure provisions are applicable after the end of the agreement with the collection agency along with its staff members. The debt collection agency returns all files related to your service and destroys all info related to your service from their data storage.
You are likely to pass delicate details to the collection agency such as your account receivables, customer contacts, product and services prices, and so on to help with faster debt collection. Setting up procedures is an extremely essential step in dealing with the collection agency. The collection agency may use one or more of its associated companies to get info about defaulting clients. In debt collection practices, the timing of interaction is extremely 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 - Selecting A Debt Collection Agency