Important factors you need to know before you choose your Collection Agency
- Length of time in business
- Size of the Agency
- Financial stability
- Collection experience (including seniority of Collectors)
- Is Agency automated to include:
- Training employees continually
- Pre-Collect systems
- Collection procedure for each client/account
- Do they have access to the Credit Bureau?
- What skip tracing procedures do they follow?
- Do they use computer systems with power dialing?
- Are their Collectors continually trained on new laws, etc.?
- Check out rates!
- Fee rates based on type/age and volume?
Notice and Be Aware!
Generally you find rates and fees are charged on a contingency basis – no collections, no charge. However, watch the firm that charges a low fee … They may not work your accounts in a proper manner and will collect fewer accounts. See what you are getting for your money.
Although you may pay a higher rate, the important factor is the Agency’s effectiveness and their net return to you.
The bottom line is: Choose the Agency which will handle your accounts in a professional manner while holding themselves the highest ethical standard in the industry.
· References: The reputation of a collection agency is very important, so contact references who have used the collection service as well as the Better Business Bureau
· Professional Culture: The collection agency that you choose is going to reflect on your business, so choose an agency that meets your needs and reflects your current culture.
· Reporting: Find out from a collection agency all the policies and procedures that they use to collect on your accounts.
Recovery: Discuss recovery percentages and rates. The net return on money collected is the key, so the contingency fee may be less important.
Remember both you and the collection agency have the same goal; to recover as much money as possible. Money recovered back to you is more important than the contingency fee the agency charges. Working together and building trust will form a win-win relationship with your agency and your stakeholders