Things Your Business Needs To Know When Hiring A Collection Agency

Once you’ve decided on delegating your delinquent accounts to a collection agency, the next question is how to find the best one. In today’s current economy there are so many different kinds it can be confusing. Following are suggestions for finding the best collection agency to suit your needs.

The first thing you need to ask when trying to hire collection agencies is whether or not they charge an upfront fee. Most collection agencies charge a percentage of the money they recover. This gives them more incentive to be successful, so there’s really no reason to employ a collection agency that takes your money up front. It frees up more of your cash flow to pay a percentage fee.

Your next question should be if they are members of one of the two professional societies for collections people: the American Collectors Association or the Commercial Law League of America. Membership in these associations indicates a commitment to professional service.

For example, both organizations require perfectly professional conduct from their members. Not only do they conform to the Fair Debt Collection Practices Act, they are committed to training courses for members to teach the latest collection techniques.

In addition, collection agencies that belong to professional organizations are more likely to do their own work rather than outsourcing it. This is important because you want accountability regarding your accounts. If you don’t know the people who are actually performing the collections you can’t really keep an eye on them.

Another thing to ask when you’re interviewing collection agencies is whether or not they make use of private investigation firms or software. Sometimes the hardest part of the collections process is locating the client. It’s absolutely imperative to pick a collections firm that will go the extra mile and hunt the debtor down if the current phone number and address you have for them isn’t working.

Ask your potential collection agency if they do all their own work or outsource it. If you’re hiring a company you want that company to perform the actual work. Some agencies outsource their calls, including to offshore call centers. Unless your collections are international, in which case you will want an international collection agency that is familiar with the local culture, this is not a good idea. Debtors tend to take these calls less seriously.

Finally, make sure your collection agency has staff working outside of standard business hours in order to maximize your collections efforts. If you have collections all over the country it’s better to hire an agency with offices nationwide in order to deal with disparate time zones. Even if all of your collections are local, make sure the collection agency has some people who work early and some who work late, because collections calls outside of the 9-5 time frame are usually more successful.