When customers owe you money, trying to collect those debts by yourself can be a huge challenge. Not only is it time-consuming to track down delinquent payers, asking clients for the money you’re owed can lead to some very uncomfortable conversations.
If outstanding debts are regular source of stress in your business, you might want to consider hiring a debt collection agency. Commercial collection agencies will track down your debtors, recover the amount they owe you, and return that money to you.
However, before you choose to work with a commercial collection agency, it’s important to learn about what they do, their process, and how much they charge for their services. Here are a few questions you need to ask when hiring a collection agency for your small business.
What to Ask a Commercial Collection Agency
Are your collectors certified?
Your commercial collection agency should have a team of collectors who are specifically trained to handle business-to-business debt. They should be knowledgeable about the principles of business transactions, and informed of the laws and compliance issues that can affect credit and collection of debts.
A reliable debt collector will have every member of their team certified by an accrediting body such as
Can the agency offer a range of services tailored to your needs?
A collection agency should never offer just one solution for every problem. It’s essential that they can provide you with a well-defined collection strategy that fits your company’s needs, including the specific methods they will use to collect debts.
Overly aggressive debt-collection methods can reflect poorly on your company’s reputation, so make sure you feel comfortable with what your debt collection agency will be doing in your company’s name.
Does the agency specialize in your industry?
If the collection agency you hire has agents who specialize in your
Do they have experience in dealing with international collections?
For businesses that operate in the global marketplace, it’s important to choose a collections agency that can manage overseas accounts to collect money from international debtors. They should be able to provide you with proof that they have served international businesses and have collected debts in countries around the globe, as well as demonstrate understanding of the local laws that they’ll have to navigate in the course of recovering your money.
What kind of legal infrastructure do they offer?
A reputable debt collection agency should have a network of contributing attorneys and representatives that will help your business take legal action when the situation calls for it. Aside from dedicated partners and law firms around the world, they should be able to provide you with in-house counsel as well. Having these resources will ensure you that your collection agency has the power to take each case to completion, without giving you more to worry about.
How effective are they at in-house collections?
The recovery rates of a company vary according to different factors such as the client’s niche, the location of the debtor, and
Most agencies forward claims to their lawyers to get a legal intervention after a certain point. However, the cost for doing this will be passed on to you, so be sure you know how capable the agency you hire is when it comes to performing in-house or internal collections. Before hiring a collection agency, ask them what percentage of collections they typically perform in-house, and how many of their efforts have resulted in litigation.
Can they keep their client data safe?
The debt collection agency that you work with should recognize that securing your data is imperative. It shouldn’t be enough that they have anti-virus software installed on their computers. They should have encrypted circuit connections, and an uninterrupted power supply if a power loss occurred. In short, the company you hire should take extraordinary security measures to guard against the various scenarios that could
Do they have a 24/7 client portal that provides timely and relevant information?
The commercial collection agency that you hire should be able to give you online access that lets you view the status of your outstanding debts in real time. This may be important, especially if your company has a lot of claims in a year.
Their portal should let you:
- View your account’s status 24 hours a day, seven days a week
- Communicate with your designated collector/collectors
- Run statistical reports
Can they give you any complimentary educational services?
Good agencies take client education seriously and provide informational programs, educational newsletters, or free webinars that equip you with important knowledge about debt collection in the business world. These resources will display the caliber of the company and how much they value giving you quality service.
Take the Time to Know What You Want in a Debt Collector
Exploring the above questions will help you become much better equipped to select the right
About the Author
Jason Armstrong is a writer and contributor for commercial collection agency