Considerations For Hiring A Collection Agency
By Dean Kaplan
If your company is having trouble with long overdue invoices, perhaps it is time to consider hiring a collection agency. The economy these days is very tough and many consumers and businesses alike are having trouble paying their bills. Often times, businesses spend a great deal of time and money trying to manage their own debt collections. While sometimes this works just fine, other times it becomes increasingly frustrating when no positive results are achieved. This is when hiring an agency can be very worthwhile. These agencies know the ins and outs of debt collection. They can take over where your employees have failed, and free up you and your employees to focus on other more productive things such as generating new sales and increasing profitability.
Agencies are hired because they are experts in debt collection. They know exactly how to work with slow paying debtors or even debtors who are unable to pay at all. They know how to call the correct person at the debtor company, and they can offer several different repayment options because they have seen it all. Because of their expertise, your company will have a much greater chance of collecting on the debt, and in a more timely fashion. Creative payment terms can make all the difference to debtors who are struggling to stay alive, let alone make payments, on outstanding debt during tough times. The more industries and sizes of claims the agency is used to dealing with, the greater the likelihood that the agency will be a good match for your collection needs,
When picking a collection agency, be sure to look for one that has experience in your industry as well as the type of debt you are trying to collect. Every agency is unique with a range of talents and areas of expertise. Check out the qualifications of the collectors at the agency. Often, a specific collector may have a strong finance background, or a specialty that works especially well in your particular industry. Ask lots of questions to get to know the “softer” agency qualifications that may make it the perfect agency for you.
If you are a business looking for help in collecting past due invoice payments from other businesses, then you may want to hire a commercial collection agency. These agencies work only with businesses to business debt. They do not pursue individuals for their personal debts such as credit cards and medical bills. By using a commercial collection agency, you know that they specialize in business debt and their collectors should be trained to understand business and how to succeed with this type of debt collection. The most reputable commercial agencies are members of the International Association of Commercial Collectors.
Agencies also have different commission plans. All of these elements should be thoroughly researched by your company before the final agency selection is made. Ask for references from agencies you are considering. Talk to other credit people within your industry to see what is working well for them. Take your time and be picky. You want to trust your agency to pursue collections with your best interests in mind. Methods used should also be considered. Some agencies are more aggressive in their approach than others. The methods used should feel consistent with how you run your company.
A common problem faced by companies attempting to get invoices paid is that their clients believe they can put off payments so long as your company doesn’t push them legally to settle what they owe. When you hire an agency, this can signal to the debtor that you are serious about receiving payment. Often, this can be enough to push them to set up a repayment plan. As soon as the collector senses that the debtor is ready to talk terms, the repayment plan discussion should begin immediately. By listening carefully to the debtor, a good collector will be able to work the discussion towards a plan that can work for both the debtor and the client. Collectors are trained to look for the fastest payback that the debtor can handle. Most debtors will attempt to stretch payments out as long as possible, but a good collector will know when to pull the lawsuit card which often will motivate the debtor to pay the debt back quicker.
Hiring a collection agency can be the best thing a company can do to get overdue invoices paid. Use these suggestions to help you make the right choice when you decide it’s time to get serious and hire an agency.
The Kaplan Group is a boutique collection agency specializing in large (over $10,000) debt collections due from businesses. Founded in 1991, the company has a stellar reputation (A+ rating with the Better Business Bureau) and is recognized as one of the leading collection agencies for results on large and complex matters.