Checklist For Hiring A Debt Collection Agency
* The debt collection company should be licensed within your state and have insurance as well as applicable bonds.
* It should have previous experience within your industry sector and should be able to prove this experience.
* Agents should understand the different types of debts. Procedures are different within the industry for debts that are 15 days past due versus debts that are more than 180 past due.
* A full examination of a collection agency’s financial statements should be available for you. Keep a close eye out for debt collection companies that use collected your collected debt as capital.
* A debt collection agency should be capable of keeping funds from different companies in separate accounts.
* The terms of the contract should be easily understood and the customer service team should be very responsive to your calls and questions.
* They should have arrangements in place for regular monthly updates on your account activity.
When To Hire A Debt Collection Agency
Debtors are difficult to work with. When they are unable to pay their past due bills or are unwilling to work with you, many companies find that they are wasting precious resources trying to recover the monies that are due to them. This is why many companies outsource debt collection efforts.
The downside of hiring a collection agency is that you will only recover a portion of the money that is owed to you. The agency will retain a percentage to cover their own costs of providing the service. It is important to find a happy medium when it comes to debts and hire an agency when it becomes too costly to do your own collection. A fully vetted debt collection company can improve the bottom line of your business.