When your collection process has reached its end and the bill remains unpaid, it’s time to turn the process over to a collection agency.
Choosing a collection agency to manage your delinquent accounts can be a tough decision. You want an agency that will represent your office in a professional manner. You want an agency that provides a satisfactory rate of recovery while not tarnishing your reputation with customers. And you want one that can implement your special requests.
Many companies make the decision to use an agency based solely on price, as if collections is simply a commodity. Like most things in life, you get what you pay for. Don’t let price be the main reason you pick an agency.
Here are the basic services an agency should provide and qualifications you should seek.
2. Market Knowledge – Make sure the agency has the skills and knowledge needed to successfully collect on your accounts. For example, healthcare, banking, utilities, finance and education all have their own regulations regarding collections. Make sure your agency understands your market and can comply with its unique rules and regulations.
3. Recovery – The recovery rate is what is most important. When you ask about what the agency expects in terms of a recovery rate, listen carefully. If the sales representative quickly gives you a percentage without asking several questions first, you might want to consider another agency. No two organizations are the same. Clients in the same industry just down the street from one another can differ dramatically.
4. Procedures and Policies – It’s important for you to feel comfortable with your collection agency. After all, they are representing your company. Make sure to ask about the following:
5. References – What do clients have to say about working with the agency? Try to contact a least two creditors in your industry currently using the agency’s services. Find out if the arrangement is successful and how satisfied clients have been with the services they’ve received.
6. Professional Credentials