Dealing With A Collection Agency
|
Step I - Selecting A Collection Agency
Selecting a credit collection agency is perhaps the most important and difficult task. Some factors you must consider while selecting a collection agency are:
- Experience and professionals
- Geographical presence
- Expertise
- Fees and charging model
- Customer references
- Collection Agency Services has covered this topic in depth through various free collections reports and articles on this site.
Step II - Hiring the Collection Agency and Setting Up Processes
Once you select the collection agency, the first two steps you have to take are:
Enter into a contract with the agency;
Set up processes on how you are going to communicate with the agency.
A contract is the legal document and your legal experts will, of course, prepare it correctly. Just make sure that you include important clauses such as confidentiality and non-disclosure. You are likely to pass sensitive information to the collection agency such as your account receivables, customer contacts, product and services pricing, etc. to facilitate faster debt collection. You want to be sure that this information does not fall in the wrong hands.
Setting up processes is a very important step in dealing with the collection agency. The success or failure of your partnership will depend a lot on how well-defined your processes are and how strictly they are followed. Important processes you need to define are:
Internal processes: You have to put in place a clear process on defining bad debt and referring the case to the collection agency. You don't want to refer the case to the collection agency before you make a sincere effort to collect the dues internally.
Information transfer: How will you transfer the information to the collection agency about your dues and defaulting customers, and how will you receive the information from your collection agency? Debt collection software can make the information transfer process easy and secured.
Third party dealing: As mentioned earlier, it is very important for you to ensure the security of the information you give to the collection agency. The collection agency may use one or more of its associated agencies to get information about defaulting customers. Hence you need to set up a clear protocol on how much information they can share with such third parties.
Communication: You need to set up single point contacts for communication within the company and the collection agency. In debt collection practices, the timing of communication is extremely important and hence it will go a long way in deciding the success of your debt collection process. Again, the importance of debt collection software cannot be overemphasized here.
Step III - Performance Monitoring
Once all processes are set, start monitoring the performance of the collection agency. This is an ongoing process when dealing with a collection agency. Important parameters to monitor are:
Quantitative
- Number of cases referred to the credit collection agency and percentage of cases successfully solved by them.
- Percentage of debt recovered by the collection agency from all cases referred.
- Percentage of debt recovered by the collection agency from solved cases.
- Percentage of amount paid as fees/commission to the collection agency to the total bad debt cases referred to them.
- Average number of days taken by the collection agency for full/partial credit collection.
Qualitative
* How well do the collection agency professionals deal with your customers?
* Has the collection agency followed all legal requirements mentioned in the Fair Debt Collection Practices Act?
* Has the collection agency gone beyond the provisions of the Fair Debt Collection Practices Act?
* Has the collection agency followed all processes and guidelines set by you?
Step IV - Contract Closure
Hopefully, the selected collection agency will work best for you. But if it doesn't, then you need to transfer all your debt collection processes from the agency. You should remember the following important points when you are ending the contract:
Confidentiality and non-disclosure clauses are applicable even after the end of the contract with the collection agency as well as its employees. The collection agency returns all documents related to your business and destroys all information related to your business from their data storage.
Following these simple guidelines will ensure that when dealing with a collection agency that it works best for you and your bad debts are minimized.
Collection Agency Services offers you a wealth of information on how to select the best collection agency for your business.
http://www.collectionagencyservices.net
|
|
|
Bankruptcy Vs. Credit Counseling: What Should I Do?
Credit Counseling and bankruptcy are both ways to relieve the stress of debt. However, they are very different and it is important to understand both before making a decision as to which is best for you.Credit counseling is a program designed to help those who are in a state of debt and cannot find a solution to their debt problems. They offer services that will allow you to work with a certified credit counselor to devise a plan ...(related: Apply for a Credit Card)
Repairing Your Credit Score And Clearing Derogatory Marks On Your Credit Report
Raising your credit score can be a fairly simple and straightforward process unless you have derogatory marks that need to be disputed (which will be explained below).The reasons for bad credit can be as follows, high balances, bankruptcies, late payments, and many others. The most significant thing you can do to raise your score is to change your financial habits. Chances are that if you have a bad credit score, you did something to make it that way. Here are some of the best ways to quickly raise your credit score:1. The most obvious: pay off your debt! This doesn't include a home mortgage, but revolving balances such as credit card debt, a car loan, etc.2. Make every payment on time. This is the most important factor in your credit score rating. If you have had late payments in the past, it will take some time to see...(related: Apply for a Credit Card)
To Repair Credit Is No Longer Satisfactory - Learn How To Earn A Millionaires Credit In 30 Days...
To repair your bad credit does not necessarily mean that you now have a good credit, absolutely not.
When most people have bad credit, they either purchase a credit repair book or seek a credit expert help. But before you do anything about your bad credit you need to understand ...(related: Apply for a Credit Card)
How To Get Credit Reporting Agencies To Help You
The process of clearing credit can be laborious and frustrating. Understanding your rights empowers you and saves you time and effort. By employing the following tips, you can enlist the help of credit reporting agencies (CRAs) as you work to improve your credit rating.A negative credit report hinders your quest for financing a house. You will have to do a lot of tedious work to clear up any mi...(related: Apply for a Credit Card)
Free Credit Reports - How To Maintain Your Credit Profile
Maintaining your Credit ProfileEvery consumer should be maintaining their credit profiles to ensure the highest scores possible. To do so, you must first order your credit reports from the three major credit bureaus: Equifax, Trans Union, and Experian. The federal Fair Credit Reporting Act (FCRA) entitles you to a copy of your creditReport for free, provided you meet the following criteria:? You have been denied credit because of information in your credit report within the last 60 days.? You are currently unemployed and are seeking employment.? You receive public assistance.? You believe that your credit ...(related: Apply for a Credit Card)
5 Ways To Raise Credit Score
It's not as hard as you think to raise credit score. It's a well known fact that lenders will give people with higher credit scores lower i...(related: Apply for a Credit Card)
Tired Of Being Broke?...learn How To Force Banks To Give You Money!
Imagine...obtaining credit that's incredibly easy...opening doors of opportunity you never ev...(related: Apply for a Credit Card)
Why Should You Use Credit Cards
Believe it or not, the way society, especially the commercial side, is set up these days, the only alternative to using credit is to pay cash for everything. But it's actually quite hard to do that. For example, if you want to rent a car, you have to have a credit card, even if you pay cash for the rental. The reason for that is because once a company has your credit card with your signature, they'll never lose money. If you default on anything, or if extra charges come up later, all they do is charge your credit card. Many companies require a credit card before they'll do any kind of business with you, for that very reason.After you enter the workforce, it's a good idea to apply for a credit card ...(related: Apply for a Credit Card)
Balance Transfers Can Help You Stop Putting Money Down The Drain!
As you probably know, interest rates are at all time low right now and if you aren't getting the best deal from your credit card company then they owe it to you to either lower your rate, or you owe it to yourself to find a better deal. You see, credit card companies need your business in order to succeed and ...(related: Apply for a Credit Card)
site-map - Copyright © 2006 | Contact Disclaimer/Webmaster | All Rights Reserved. | Apply for a Credit Card