In order to keep your business afloat, you must collect payments for the products you render. But if you’re a Credit Manager, you likely have very little time on your hands to make frequent calls or to write letters in an effort to collect delinquent debts.
The older the debt gets, the harder it is to collect. If your demands for payment have been unsuccessful, hiring a debt collection agency can improve your DSO by 60%!
Undoubtedly, hiring a collection agency is one of the easiest ways for you to put the focus back on your business, and track down hard-to-reach customers. But with over 6,000 agencies in the U.S., how can you assess and select a debt collection agency for your business?
Follow this 7 point checklist to guide you on how to assess, choose the right third-party Collection Agency to lower DSO and bad debt write-offs:
1. First Time Considering An Agency
How are they rated by other businesses in your industry? What are the reported advantages of working with this agency, according to authorities? For instance, feel free google the agency’s name and go through all the reviews, good or bad. The internet is the best for providing unfiltered feedbacks.
2. Customer Service Behaviour
Are they friendly and supportive? Do they pay attention to you and consider your concerns? Is a problem you raise resolved quickly and appropriately? Do they work together while resolving a challenging client issue? Read how to get rid of customer service roadblocks to know more.
3. Willingness To Address Concerns
Do they accept a "Communication Plan" that calls for regular meetings to discuss open concerns, as well as any system or process problems that can improve performance? How will they resolve your concerns? Here’s how you can ace your meetings to communicate better.
4. Professionalism
Do they interact with your consumers professionally, outlining the reason for the contact and looking for the best person to make a decision? Do they continue to adhere strictly to all applicable rules and regulations? Has the agency received certification from one of the organizations that assess and certify collection agencies? You can start by Highako Academy certification courses.
5. Quality and Timeliness of Reporting
Are the updates clear to understand? Is there a real-time website that allows you to check on the status of your accounts yourself? Can the Agency’s system be integrated with your credit and collection software? One way you can seamlessly transfer your critical customers to third party collection agencies is with the help of CADE (Collections Agency Data Exchange), a product by HighRadius.
6. Flexibility
Are commissions waived during a "free demand period" if payments are made quickly after the initial demand? Does Your OCA (outside collection agency) fulfill your specific needs? Find our here.
7. Value-Added Services or Software
Does the agency have the capacity and willingness to assist you in enhancing your internal Credit Management and Collection efforts? Do they provide your team with informative mailings, webinars, and training programs? Can they offer automation that complements or enhances yours? Check out the Collections App offered by HighRadius to accelerate past-due recovery.
Final Thoughts
Using a collection agency to help recover unpaid debts has several advantages. The 7 points we've listed above is a great place to start. Before hiring an agency, preparing a checklist beforehand can help you choose a debt collection agency that will represent you ethically and professionally, while still getting results!
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