First and foremost, before selecting a collection agency, think carefully about the type of relationship you want.
It’s extremely important that the agency you choose can work with your team in a way that will meet your needs.
There are thousands of collection agencies throughout the U.S. and all can be very different when it comes to knowledge of your industry, communication
So what should you expect from your collection agency?
1. Expertise: Collection agencies should be expected to have complete expertise in your industry. If collections pertain to insurance product lines, you want a company that knows audits, earned premium, deductibles
This same philosophical approach is needed in other industries as well. Collection agencies should uphold the same business standards as you do when representing your company policies without alienating your customers.
2. Communication: You should be able to communicate with your sales representative and outline your company needs and expectations. This can be done by the agency providing you with detailed reports such as status reports, recovery analysis reports (which provides information based on the age of the accounts) and a remittance statement of payments received each month.
3. Online Access: Online open access is a great asset to expect from your agency. It allows you to review accounts through the agency’s website in real time.
4. Details: The agency representative should provide you with detailed options on how they will be handling your accounts and be in sync with your accounts receivable management strategy.
5. Reviews: Have your sales representative host a quarterly review meeting. This is a good time to bring up questions or concerns regarding your account. Consistent communication with your sales rep/operations builds trust and should provide proof that your agency is staying on top things and you are collaborating on best practices.
6. Inventory Updates: Besides your sales representative, your agency’s client services department plays a major role in keeping you informed about your inventory. They will advise you of payments, disputes or additional requests needed to resolve an account. These are all factors in the success of building a positive relationship with your agency.
7. Litigation: When all collection efforts have failed, the agency should inform you of a final option based on the balance amount and if litigation is necessary. They should provide you with a detailed summary which gives you information such as financial statements and asset information to make your decision the correct one.
8. Standard Operating Procedures: Your collection agency should have standard operating procedures available for you to review.
If the collection agency has an onsite law office, then you will have the best recommendations possible, as this will reduce additional expense instead of approving an account for a suit at a higher contingency rate. Your delinquent customer will likely pay a balance if they receive a letter and call from an attorney. This increases recoveries without increasing contingency fees associated with litigation assignment.
Managing the accounts receivables process closely and anticipating customers’ needs is an important part of making sure the customer experience is favorable. When choosing a collection partner, be sure to ask the right questions so you can make a wise (and profitable) choice.
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