Debt collection agencies can be an invaluable extension of your credit control processes and team, especially when collecting payments from difficult customers or having the skills and expertise to chase overdue invoices.
Today, there are more and more businesses looking to outsource their collections to help save time, because they don’t have the personnel in-house, they don’t have the skill or expertise, or they’ve tried and have had limited success.
However, choosing the right commercial collection agency to support your business practices and take over unpaid invoice collections can be difficult.
There are some key areas and pieces of information you need to know to help you make the
most informed decision.
Questions to ask a debt collector
1. Do you know our industry?
Every sector is different and operates in very different ways. Understanding these varying practices and the industry, in general, can be essential when successfully carrying out collection practices.
Find out what industry the agency primarily serves and the collections they typically deal with.
An agent who knows your industry can bring their expertise, knowledge, and results to your operations, increasing the chances of a successful collection.
2. How long have you been in business?
This isn’t to say that start-ups aren’t experienced collectors, but it can be important to look at how much experience the agency has. For example, what is their reputation, their success rate, etc.?
The longer a debt recovery agency has been in business, the more chance you will find online profiles and customer reviews.
3. Does the agency in question have any accreditations/associations?
Is the commercial collection agency a member of any professional body or associations? For example, do they have any affiliations with industry bodies like the Credit Services Association, are they regulated by the FCA?
This information can be important as these associations and affiliations mean the agency abides by regulated Codes of Conduct, ensuring that they operate at the highest industry standards.
4. What training or skills do they have?
What qualifies these teams as debt collectors? Make sure to check out their experience, how long they have been involved in collections, their success rates, and customer testimonials.
5. How much do they charge?
Each collection agency will charge different fees and have different payment terms depending on the services they offer. Before hiring a collection agency, you must know these in advance, so you don’t get any nasty surprises in the long run.
The more transparent and upfront an agency is with you, the better.
6. What is their collection process?
How does the agency operate, what process do they follow, and what tactics do they use to collect outstanding debts? And do these methods and practices meet your values and company behaviour?
You need to understand how your customers will be treated. For example, is maintaining relationships at the forefront of the agency’s process – is this important to you?
You want an agency that reflects you, your business, and your company ethos.
7. How can you monitor success?
Are you able to track the progress of collections? Are you provided with regular updates and reports? Do you have a dedicated account manager or point of contact?
The answer to these questions can help you determine the level of customer service both you and your customer can expect.
8. As the client, what will be expected of us?
Professional debt collectors will look to work with you, so they will require all background details and information beforehand. This can include all customer correspondence, including emails and phone calls to help the debt collector build up a complete profile.
Contracts must also be agreed upon and signed at this stage so everyone is clear what is happening, how long the set-up can take, and how long the overall collection process will take.
9. What are the business hours?
It’s important to note what business hours the agency works so you know when you can contact them and when your customers will be contacted.
It is also key to know if there are any additional services they can offer to support your business further.
10. Can they locate a debtor who has `gone away`?
Professional collection agencies will have experience in various tracing methods and technology to help locate even the hardest to find customers.
Effective tracing systems and methods can significantly improve the chances of successful collection, so it’s good to know what additional services your agency can provide.
Companies looking for collection agencies
The realities of carrying out robust credit control procedures and debt collection practices should not be underestimated (check out our post on Debt Collection Realities).
If you’re thinking about hiring a commercial collection agency to help with outstanding and overdue invoices, it’s important not to delay, as the longer an invoice is left unpaid, the harder it is to collect.
Direct Route is a team of experienced, professional, trained collectors. Committed to providing excellence as we continue to set high standards.
This (as well as our high success rate) is why so many businesses choose to work with us.
If you’re looking for a successful return on investment, an agency that looks after your brand and maintains customer relationships while successfully collecting monies owed, look no further.