After you make the decision to hire a commercial debt collection agency, you will almost immediately shift to an evaluation mindset. Whether you have a specifically designed report card or just a general idea of how they are doing, you will almost certainly be curious about their progress. You will also want to be able to evaluate how this progress compares to your expectations and the industry averages.
Your initial instinct will be to evaluate your debt collection agency based on whether or not they have collected the outstanding debts you have assigned them. However, there is quite a bit more to the process. If they did collect the debt, did they do it fast enough and at a reasonable rate? If they haven’t collected the debt yet, are they really trying as hard as possible? In either situation, are they treating you in a way that makes you feel like an appreciated client?
As you can see, there are a lot of different levels of performance for any debt collection agency. Here are some common factors to consider when evaluating the agency you hire:
Recovery Time
The time that it takes the agency to recover your outstanding debts is probably the most important concern to you. If you have only assigned one outstanding debt, how quickly was the agency able to recover it? If you have assigned them multiple debts, you can average these numbers together to get an overall evaluation.
Keep in mind that every agency’s recovery times will vary based upon the types of debt they are collecting and the amount of information you are able to provide about the debtors.
Recovery Rate
What percentage of the outstanding debts has your collection company been able to collect? Once again, this number can range quite dramatically based on the types of debts and the amount of information you have outstanding. If you are working with multiple debtors, it can be helpful to group them in terms of location or how long the debts have been delinquent.
Collection Fees
This is probably something you spent time evaluating before you hired the company, but how well have they stuck to the rates they quoted you? Any additional fees that were not previously discusses would be a huge red flag.
Value Added Data
Another way to evaluate your debt collection agency is based on the value that they are able to add to your collection process. Many agencies will be able to provide you with a vast amount of data about your outstanding debts. The agency could coach you on how to use this type of data to improve your credit screening process.
Many debt collection agencies will also offer other forms of coaching or education for you or your staff in order to improve your debt collection or credit screening abilities.
Relationship & Interaction
This is probably the most important qualitative evaluation criterion. The credit collection agency that you hire should make you feel completely comfortable about the entire process.
They should also treat you, your staff, and even your debtors with respect. If you are dealing with an international debt collection, are they helping you to understand the process?
Timeliness & Flexibility
In addition to treating you in a professional manner, your collection agency should also be more than willing to adjust their debt collection services to meet your needs. If you have any requests, are they met in a fast and appropriate manner?
As you can see, there is a lot more to evaluating a collection agency than how fast they collect your debts or what they charge to collect them. This is just a basic list that boils down to the fact that any debt collection company should make you feel completely comfortable with the entire process. If they don’t, you are probably working with the wrong agency.
