What qualities define the top collection agency for your company? A strong debt collection partner will optimize the amount of debt that is recovered and returned to you, be open and honest about their procedures and reports, and support the upkeep of a good rapport with your consumers. Here are six suggestions for choosing the best debt-collecting partner, keeping those objectives in mind.
Consider total ROI, not just the initial price.
When determining which partner to select, the collection percentage paid by an agency is just one aspect to take into account. The amount of money that the agencies actually return to your wallet is what matters most, despite the temptation to compare them exclusively on that percentage. The outcomes that agencies obtain on the number of accounts they actually collect on vary greatly, despite the fact that many charges a flat percentage of what they are able to collect. A low agency percentage may lead to the neglect of other debt as easy-to-collect debt is encouraged to be worked on. Conversely, a debt collection agency won’t actually provide as high of a return as one with a higher fee rate and better collection percentage.
Insist on Customer Service.
The days of frightening recalcitrant debtors with breaking their kneecaps are long gone. Instead, the best contemporary organizations strongly emphasize facilitating different payment options, payment plans, and early intervention for clients. Find a partner who can assist you in enhancing your internal process with payment notices early in a debt’s life cycle.
Making sure that all calls are placed from a domestic collection office is a crucial component of providing excellent customer support. Due to the delicate nature of the relationship between your company and its clients, outsourcing should not be used in the collecting industry in today’s business environment. Domestic call centers benefit both customer happiness and revenue collection. Working with a local or national collection firm will help you avoid debtor complaints.
Find partners, not collectors.
Just like a marketing consultant works with a company to create better sales results, a collection agency partner should work with you to develop a system for managing your accounts receivable to increase your bottom line. In addition, collection Agents are experts at debt recovery and should work with you to improve your in-house collection efforts. For example, many collection agencies will help mitigate risk by conducting credit checks on potential customers or help institute pre-collection measures that regularly send out payment reminders.
Look at their track record.
As with any purchasing decision, the best information comes from people who have used their services. Ask for referrals from organizations or individuals that would know best. Some good resources to turn to for information include:
● Accounting firms
● Business contacts
● The Chamber of Commerce
● The Better Business Bureau
Finding a company with experience in your particular business makes sense because collection rules differ from industry to industry. They will frequently be more prepared to handle the particular difficulties faced by that industry and use that knowledge to enhance recovery while upholding a compliance system.
Check for required Licensing.
Agencies must hold a license to operate in the state where they are located in accordance with collection agency legislation. A collection agency with a local license is more than adequate for companies that work with in-state clients. However, if your company operates nationally, you will require a collection agency that is authorized to operate in every state where your clients reside.
Failure to routinely report collection rates is a common mistake made by many 3rd part debt collection agencies. A minimum statement and payment for any accounts should be provided each month, along with access to an online portal where you can examine recovery rates whenever you choose.
The correct collection agency can significantly improve your cash flow. However, before making a final choice, research to ensure the partner you choose will help you achieve your goals.