Guidelines before choosing the right business Debt Collection for your Business
Aside from draining your resources, dealing with delinquent accounts can be taxing and frustrating. When you don’t have any other resort, it is recommended to hire a business debt collection agency.
While you can do the process of debt collection on your own, there will always be instances wherein you need to hire a professional business collection agency to deal with delinquent accounts. However, it is important to note that not every agency can provide the job that you need for your business. Reputation is not the only important aspect to consider. You need an agency that is appropriate to your business culture and offers the type of relationship you think is essential.
The following are the areas you need to focus on in order to select the right collection agency for your business:
Location and the size of the agency
Collection companies differ from small local companies to big global firms so make sure to choose an agency that matches the size and the scope of your business. For instance, if your business operates locally, you can opt for a small collection company. On the other hand, if your business works internationally, it is best to find an agency with expertise and contacts across the United States and in other countries.
Determine your customers before hiring a collection company. If the customers of your business are consumers, opt for an agency that specializes on consumer claims while if your business deals with other businesses, go for a commercial agency for B2B or business-to-business accounts. However, if your company has a mixed portfolio, it is best to divide it so that you can use the skill of your collection partners. Another alternative is to look for an agency that has comprehensive experience in both commercial and consumer collections.
Standards and integrity
If you want to transact with the customer again after settling the bad credit, choose a collection company that values honesty and complies to high standards when it comes to customer relations. Remember, the manner your customer and collection agency handles the collection process always reflects on your company and a reputation for unprofessional customer treatment and unethical collection practices is important.
Don’t forget to ask the agency’s length of service in the business as well as its experience when it comes to company leadership of the managers and executives in collections. In addition, their collectors should be certified to make sure that your accounts are in good hands.
Financial and legal position
While large collection agency services are usually the best bet, keep in mind that the size of the agency does not necessarily mean competency. There are some small and mid-size companies that are more financially stable compared to larger firms. Make sure to determine if the agency of your choice has financial issues that may have an affect on the agency’s ability to pay you the collected money. Before signing anything, check their accounting practices.
A lot of states demand collection companies to be licensed to be able to operate within said states. Ensure that your chosen company is licensed especially in the states where your debtor lives. In addition, they must be satisfactorily bonded and secured as mandatory by law.
Generally, the process of collection is the same in all industries. There’s no huge difference between collecting from a retailer/distributor and from an importer. However in some industries such as health care and telecommunications, there are special regulatory conditions to consider. Collectors who work in the areas ruled by these regulations should be experts at implementing them.
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ABOUT THE AUTHOR
Jag Cruse is a CPA with over ten years of experience on financial services. Additionally, she’s also an expert in technology resources, corporate planning and business debt collection. She works with the executives of collection agency services to improve operational and financial performance throughout the system.