Tips To Choose a Debt Collection Agency
All business, big or small face issues regarding debt collection at some point of their business. To clear these accounts you might need an outside agency to loosen the tight necks in these situations...
All business, big or small face issues regarding debt collection at some point of their business. To clear these accounts you might need an outside agency to loosen the tight necks in these situations. There is a considerable amount of debt collection agencies in the U.S. finding the right agency best suited for your business is the actual trick for getting things done efficiently.
There are certain criteria for choosing a debt collection agency for your organization
The customer base: Ascertain what kind of customers you have- are they consumers or are they businesses, or do they fall in both the categories. The commercial collection agency that you choose should have specialized skills in recovering debts from these types of customers. Your best option, however, would be to find an agency who has experience in both consumer and business collections.
The size and location of the agencies: Debt collection agencies range from small local firms to large multinational agencies. If your business caters to local and regional customers, choosing a small collection agency will be viable as they would have more local contacts. On the other hand, if your business spreads nationwide, a firm that has wide spread contact will be more efficient.
Legal and Financial Stability: The financial stability of a collection agency and its legal stance plays a major role in setting its standards and size. A small firm that is financially stable is much more dependable than a larger organization with legal and financial disputes in their records. While employing a debt collection agency check their financial stability as well as their legal standings. Generally a commercial collection agency has to be licensed to collect within a certain state. Ensure the agency that you employ is licensed to practice and is also insured.
Know-how: Experience matters. Find out how long the debt collection agency you have contacted with has been in business. How successful have been in their previous collections, whether they are certified or not.
The Commercial Collection Agency Association launched its Certified Collection Professional Program in 2005. The commercial collection agencies are required to complete this course and pass an examination to get a certification.
Specialization: Some of the industries such as healthcare and telecommunications have certain regulations to be followed. Other than a few of these major industries, collection procedure from retailers, importers and other consumers are more or less the same. If you are working with these governed bodies, you will need agencies that have experience, knowledge and skill about the state laws for recovery.
Technology: If you have a bulk of collection to be handled every year, choose an agency that has updated technical knowledge and has access to the internet. This will enable you to stay communicated with the work done and the work pending and tally accounts easily.
Fee Structure of the Agency: Find out the fee structure that your selected works with. Most of the debt collection agencies work on the “no collection/no fee” structure. This is the basic fee structure followed by collection agencies around the world. Some of the agencies added the factors of the 1) location of the debtors 2) age of the account 3) consideration of manual or automated placement, while deciding their fee structure.
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ABOUT THE AUTHOR
Jag Cruse, has his own debt collecting agency and is also a financial consultant working independently in Houston. Jag provides tips for choosing a commercial collection agency that is best suited for a business.