Any business, no matter how big or small, will ultimately have a problem with collections. Despite your attempt to do your best, there will always be some clients that will fail to pay and if your business does not have enough employees or extra time to call, follow-up and monitor these delinquent accounts. This is why you have to consider outsourcing the job.
The best collection agency has the negotiating skills and legal expertise necessary to effectively collect debts on your company’s behalf. Hiring a qualified collection service to deal with your delinquent accounts is a sensible choice but what are the important things that you should search for in a commercial collection agency?
Choose a collection service that meets your requirements. It should have the resources as well as the experience needed to collect your unsettled accounts receivable. In addition, it is important to determine the type of equipment or technology they use in dealing with accounts. For instance, a lot of collection companies provide assistance such as skip-tracing to track down the address of your debtors. There are some collection companies that provide additional services that can help even before an bill goes delinquent. these assistance includes coding, billing, hosted dialers, print and mail and pre-collect services. It is essential to talk about all your requirements and make sure that the company you choose can manage them before hiring.
Knowledge about the Industry
The best collection agency should have a wide understanding about the industry. For instance, if you are in the healthcare industry, the collection agency that you should choose must have experience in dealing with medical debts. Also, it must be familiar with medical terminologies and insurance billings in order to achieve the best results.
Check the agency’s past results with the same clients in similar industry and geographical region. It is important to have benchmarks but also note that all the aspects that go in the account’s recover. However, ensure that the comparison is between two similar accounts with the same average balances, demographic area and age. Most of the time, a collection company will advertise a very high result with a certain client but upon comprehensive assessment, it is established that the accounts are forwarded to the agency early.
Know the agency’s rates. A lot of agencies ask for a commission on every payment, which is appealing to most creditors since you only have to pay for outcome and not the past due bill. Keep in mind that the commission rate differs depending on the average balance, the age and the kind of debt. Do not be swayed by offers that are too good to be true. What you want is a reasonable fee but you also need positive results.
Record of Compliance
Look into the background of the commercial collection agency before employing them. Know if they are affiliated with the industry trade groups or they are following the most up-to-date rules and regulations. Request for details about their procedures and policies and make sure for sample flowcharts, notes and letters on sample accounts. Lastly, ask if the agency had any case of regulatory penalties or lawsuits filed against them. FDCPA or Compliance with the Fair Debt Collection Practices Act is essential to make sure that your business is being represented in the most ethical and professional manner. Depending on the kind of industry you serve, there are several other regulations to consider so make sure to do your research and ask the hard questions before signing any kind of agreement.
Joan Geller has more than twenty years experience on financial services. She manages numerous areas of the company’s accounting and finance functions, apart from technology resources and corporate planning. Joan also works with the department managers and executive teams in order to evaluate and improve operational and financial performance throughout the corporation. If you require any information on collection agency services, get in touch with her by visiting www.commercialcollectionsfirm.com.