5 Tips for Hiring a Collection Agency
When unpaid accounts interrupt your cash flow, you have two options: Collect the debts yourself or hire a collection ...
When unpaid accounts interrupt your cash flow, you have two options: Collect the debts yourself or hire a collection agency. The latter option may prove to be the most cost-effective for businesses as long as they hire the right company. Read on to learn about the essential criteria when hiring a collection agency.
- Learn About the Debt Collection Agency’s Process
When accounts get seriously delinquent, it’s time to call in the professionals.If you know how a collection agency operates, you can more readily trust its employees to represent your company fairly. An effective collection agency typically uses a multi-step process that it has validated over years of practice. It has fine-tuned its approach to debt collection so that it recoups as much money as possible for its clients.The process might involve sending letters, making phone calls, and consulting a legal team. However, it shouldn’t include threats, intimidation, or other illegal or unethical debt collection methods. Otherwise, you risk tarnishing your company’s name and ensuring your customers will never patronize your business again.
- Understand the Agency’s Specialties
Agencies typically specialize in particular areas and methods. For instance, one agency might work exclusively with healthcare clients and medical debt collection, while others might specialize in government, financial services, small and mid-sized businesses, etc. Additionally, some agencies only take cases during certain stages of collections. For instance, an agency might not accept an account that is more than a certain amount of days past due.
- Ask About Skip Tracing
The best collection agencies use a method called skip tracing, which means that they use software and databases to find clients who have moved or changed phone numbers. Without skip tracers, a debt collection agency isn’t as effective in reaching your past due accounts.You can ask if the agency has their own skip tracing process or if they outsource it to a third-party service. Additionally, find out how long companies take to find customers who have defaulted on loans or accounts.
- Learn About Success Stories
Ask for testimonials or case studies. You want to know if the agency’s customers are satisfied with the service they received. Research shows that almost 90 percent of consumers trust online reviewsas much as referrals from people in person, so it’s a common way to prove that an agency can get the job done.
- Inquire About Communications
Find out when you’ll learn about the cash your agency has collected.When you trust a debt collection agency to recover money from delinquent accounts, you want to be able to make sure you’re up to date on all of your placed accounts. Find out how the agency prefers to communicate with its customers as well as if there’s an online portal where you can see the latest information on your placements.You can also ask whether you will receive regular reports. There’s no set industry standard, but most collection agencies report at least quarterly. You’ll receive a document that details the money the agency has recovered as well as information on outstanding accounts. And, if the agency does have an online portal, ask what reports can be pulled directly from there.
When you’re hiring a collection agency, you want the best talent at your fingertips. In addition to the above criteria, we encourage you to consider ease of use, compliance, data security considerations, and how they use their data to your advantage. Check out why our clients choose TSI to be their debt collections partner today.