Hiring a commercial debt collection agency could be the best or worst thing you ever do for your business, no matter what product or service you specialize in.
In almost every case, the result of partnering with a debt collection agency will be determined by the caliber of agency you choose to work with. Therefore, selecting a well-respected debt collection agency is essential to ensuring your business maintains the solid reputation you have worked to build for it.
Consumers today have a wide range of options for getting the word out if they feel that they are not being treated properly, so if you are going to hire a commercial debt collection agency, you absolutely must make sure that they understand how important it is to conduct business on your behalf respectfully and professionally.
Things to Consider When Hiring a Debt Collection Agency
Conduct your own background check.
The internet allows everyone to search for information on people they are considering, and debt collection agencies are no exception. Take the time to run a few searches on any agency you are considering partnering with to ensure they have a history of compliance with local laws and establishing polite communication with customers.
Look for industry-specific experience.
You also want to make sure that the agency you are working with has plenty of experience in your specific industry. Ask them to provide you with references from similar businesses and make a point to actually contact those references to see exactly what you are getting yourself into.
Focus on collection agencies that specialize in similar size businesses.
There are many different ways to define the size of a business. Still, you want your debt collection agency to have experience working with companies with similar employee numbers, overall revenue, and outstanding accounts receivable.
Understand the fee structure.
You will want to determine whether the commercial debt collection agency you are considering will be working on a flat rate or a contingency fee basis. In most cases, only paying for collected debts makes the contingency fee basis much more appealing. However, there are many options here, so make sure you understand everything involved.
Learn about the process of the agency you are hiring.
Having a commercial debt collection agency representing you means giving up significant control of the collection process. However, this can be good if you hire an experienced agency with plenty of efficient operations.
Take the time to ask for a step-by-step guide breaking down the agency’s process for handling a case you provide them. Establish what you need to offer them as documentation, and understand what they will do with that information.
An agency that is not willing to share its process is likely doing something unacceptable, so be sure to call out any agency that attempts to hide behind “proprietary methods” of any kind.
How will you be updated on progress?
Communication is one of the most significant weaknesses of many commercial debt collection agencies, so make sure that you reach an up-front understanding of how you expect to be updated regarding any collection accounts you send to them. Determine who your point of contact with the collection agency will be and how frequently you can expect status updates.
The Impact of Debt Collection on Your Business
Outsourcing your collection accounts to a commercial debt collection agency can take a tremendous load off of your team, allowing them to focus their efforts on the things that actually make a difference to your top-line revenue.
However, it is collecting everything owed to you that makes sure your bottom line profit is in line, and that is where having a fantastic debt collection agency on your side can add value.
It is critical that you choose a debt collection agency that is both competent and professional. You want the agency to conduct itself in a manner that reflects your business positively. There is always the potential for negative emotions to come into play in debt collection situations, so having an agency that can handle that is crucial to success.
After considering all the factors above, you should understand how a commercial debt collection agency will operate and how that will reflect on your and your team. When you are ready to make that decision, contact us at Direct Recovery, and let us start making your life easier by handling collection on your behalf.
