It can be difficult to collect a debt if you own a business.You might consider hiring a commercial debt collection agency instead of trying to track down your debtor.If you owe money, these agencies will help you collect it and return it to you.Before you make a decision about hiring a commercial debt collection agency, it's a good idea to learn more about what they do and what fees they charge.
Step 1: Determine if you need a collection agency.
Collection agencies help businesses collect debts from their customers.These agencies are usually called in when a customer's account is not paid in a certain amount of time.A collection agency is an essential part of doing business for businesses that have a lot of accounts that are not paid.If you are owed money by a new customer, you will need to hire a collection agency.A customer agreed to a payment plan but didn't follow through.
Step 2: Determine if you need a commercial or consumer collection agency.
The two types of collection agencies are consumer and commercial.Consumer agencies focus on individual people while commercial agencies collect from businesses.Some agencies are capable of handling both.If you only have one type of clients, you should hire a specialized agency.If they are split evenly, consider hiring a collection agency that can handle both.
Step 3: Determine the age of your debts.
The age of the debt is an important factor to consider.It is completely different to collect debt that is more than 120 days past due.Determine the average age of your accounts.This figure can be used to find an agency that specializes in that age of debt.
Step 4: Determine the average size and Frequency of your debt collection needs.
A large company that has a lot of debts will want to work with a collection agency.The same applies to small businesses.Smaller agencies can handle up to 100 annual claims for less than $1,000.If you have over 1000 annual claims or your claims are over $25,000, you'll have to hire a large agency.
Step 5: Ask which services the company provides.
If you find a potential debt collection agency, you should learn more about their services.Some agencies are better suited for certain services than others.Do you know if the services an agency offers are right for your business?Many services will try to locate individuals that relocated in an attempt to avoid repayment.If a debtor flees to another area, some agencies will forward your account to other agencies.Prevailing debt collection or consultations may be offered by agencies.
Step 6: Understand the agency's focus.
Some debt collection agencies have different areas of focus and expertise.The agency's focus may be different based on the size of the agency.If it is a good fit for your needs, do some research and learn more about the agency's focuses.You should look for an agency that focuses on the same area as your business.If you work in the medical industry, you'll want an agency that has recovered debt before.
Step 7: Look for an agency that has the right capabilities.
Depending on their size, location, history and professional direction, different agencies have different capabilities.Before working with a commercial debt collection agency, it's a good idea to learn more about what they can do for you.Look for a collection agency that is the same size as your business.The agency should be large enough to handle the amount of cases you have.
Step 8: An appropriate approach to collections is what you should choose an agency with.
The approach to collections is one of the things to look for in an agency.Do they use fear and intimidation to achieve their goals or are they stern but polite?When you interact with your customers, your collection agency is an extension of your own business.Good customers who are experiencing temporary difficulties can be run off by a heavy hand.
Step 9: The agency should be licensed.
Before debt collection agencies can work with clients, they need to be licensed.You'll want to look elsewhere if you're considering an agency that isn't licensed.Before working with a debt collection agency, make sure they have the necessary licenses.Some states don't require agencies to be licensed.You can ask for a copy of the license.
Step 10: Check the qualifications of the agency.
It is important that the agency you are considering has the necessary credentials.There may be agencies that aren't qualified that could be a liability for your business.Before hiring an agency, ask to see evidence of their qualifications and credentials.It's important that your agency is insured.Look for an agency that is solvent.Look for memberships in trade associations.
Step 11: The agency has policies and ethics.
It's important to make sure that the agency you're working with does its job ethically.It's a good idea to make sure the agency complies with federal standards.If you know that the agency will collect your debts ethically, you will have peace of mind.The agency you work for should abide by the policies of the FDCPA.If the agency has had any complaints filed against them, you should check with the better business bureau.
Step 12: You can learn about the agency's past experience.
Learning more about an agency's past successes can help you decide if they are right for you.You will be able to learn how long they've been in operation, how well past clients have rated their services, and how likely they are to provide valuable services for you.A long history of success is what the agency you're working with should have.Specific rates can be asked about, such as the rate that the agency is able to recover debts.
Step 13: How can you stay in touch with your case?
Track their collection efforts with most commercial debt collection agencies.Whenever you have a question or want an update on your case, you should be given a way to contact the agency.Do you know how you can contact the agency before completing the deal?The ability to check on your cases online is offered by many agencies.If you have a lot of cases, you'll want to make sure you get online reports when you need them.
Step 14: Understand the costs and fees of the agency.
You'll want to ask about the billing process once you've found an agency that is qualified to work.Different agencies have different billing policies.There are two main methods that debt collection agencies use to collect their fees.Agencies take a percentage of the debts they collect.Depending on the agency you are working with, the percentage will vary.
Step 15: Understand the agency's debt collection parameters.
Make sure your collection agency knows your boundaries when dealing with customers and collecting debt.Is it possible to discount debt for payment?How much and at what point?If they continue to ignore collection notices, can they take the creditor to court?Think about how you would like your customers to be dealt with and adjust your expectations for the collection agency.
Step 16: Additional benefits can be taken advantage of.
Additional benefits may be offered by some agencies.The benefits can help you learn more about debt collection and demonstrate the agency's commitment to customer service.To get the most out of your debt collection agency, ask about the extra programs.There are educational newsletters.