The United States’ overall mortgage delinquency rate was 5.9% in November 2020. And it’s not just mortgages that are going unpaid. In every sector, people are failing to make their payments on their debt.
As a business, you know how detrimental unpaid bills can be. It can undercut your margins, wreak havoc on your cash flow, and cause you to consider raising prices and cutting expenses.
Perhaps you need to consider working with a collection agency. Read on to learn how to hire a collection agency that will serve your best interest and protect your good reputation.
1. Evaluate Their Customer Service
Menacing threats and middle-of-the-night phone calls are not the methods top debt collection agencies use. In fact, these tactics go against the Fair Debt Collection Practices Act.
You want to protect your relationships with your customers. That is why it is important to know how to hire a collection agency.
These days, a good debt collection agency will find ways to make it easier for delinquent customers to pay.
Often, they offer multiple payment plans and various channels. Also, early intervention can prevent a bigger issue. Top collection agencies will help mitigate risk through pre-collection measures, like sending out payment reminders at regular intervals.
When you are on the hunt for the best collection agency, be sure to look for a company that will work with you to leverage your in-house processes.
Make sure that the account collection services you look into are making contact with debtors from a domestic office. This is not the area of your business you want to outsource.
The best way to protect these fragile relationships is partnering with a collection agency that prioritizes your relationship with your customers.
2. Check Out the Reputation of the Collection Agency
A collection agency will contact customers on your behalf. The way they treat your customers could hurt your image. That is why it is vital to choose account collection services that are reputable and professional.
One of the best ways to be assured that you are hiring the best collection agency is to partner with an organization that has credentials to prove its reputation.
For example, look for a company that is accredited by the Better Business Bureau. Accreditation by the BBB means that the business meets strict standards, including a commitment to resolve customer complaints.
The BBB has a database of complaints and ratings for businesses based on feedback from consumers. You will want to review the rating, comments, and complaints about any agency you are considering partnering with.
Another option is working with companies that are members of ACA International. ACA International members must adhere to specific standards.
3. Regular Reporting
Ask all the collection agencies you interview how often they report collection rates.
It is common to expect a monthly statement and payment. The top agencies also offer an online portal where you can log in to see recovery rates whenever you choose.
Partnering with the right agencies can make a big difference to your cash flow. That’s why it is vital to select the right partner that will get you the best results.
Key Takeaway on Finding the Best Collection Agency
There you have it! After reading this article, you now know that a collection agency is an extension of your business.
Consider your unique needs, your industry, and the specifics of each agency you research. One with a solid reputation and a proven track record of success will ultimately lead to your success as well.
Credit Management Company (CMC) is a nationally recognized Accounts Receivable Management Company providing services to the Healthcare, Commercial, and Consumer industries.
Check out 5 More Steps to take in Part 1 of this series!
Contact us today to learn more.