While there are many reputable collection agencies out there, there’s a reason why the industry has gotten a bad rap. Before you choose a collection partner, it’s important to do your research. But how do you know what to look for in a reputable collection agency to represent your business? Let this serve as a helpful guide to asking the right questions.
What’s the right approach to collecting debt?
When reviewing different firms, it’s important to understand that not all debt collection firms are alike. One thing you’ll want to understand is the difference between a debt buyer and a debt collector. A debt buyer will purchase your debts for a low price and keep whatever they can collect from the customers. A collection agency, however, will turn the money over to the client, either minus a fee or simply bill the client for their fee. While either approach can help reduce your accounts receivable, going with a collection agency is more likely to deliver the results you’re looking for.
Equally important is asking the agency to discuss how they ensure that their collectors are adhering to state and federal laws. They should not only be licensed and bonded to collect in all 50 states, but collectors should also have adequate training and resources to tailor each communication to the applicable laws and regulations.
A reputable collection agency would be more than willing to share details on how they go about resolving your accounts, including:
• How often customers are contacted and in what manner.
• How accounts are prioritized to optimize time and resources.
• Tools and strategies to resolve problem accounts.
• Methods used to monitor and track quality control with customer interactions, including external audits.
Which organizations do they belong to?
Memberships and affiliations are always a good sign that a firm is committed to adhering to the best practices and standards in the industry. Agencies that belong to ACA International (Association of Credit and Collection Professionals) must adopt specific values and live by the collector’s pledge.
How well do they know your industry?
In industry groups, you may find some collection agencies with an affiliate membership — which is a good sign, because they often have to live by some industry standards. This can make your search even easier, because these groups have to show they can represent your firm without violating industry standards. Healthcare is a great example, because they’ll want to work with collection agencies that can demonstrate their knowledge of HIPAA and relevant regulations.
Businesses like yours turn to collection agencies because they can contact past-due customers on your behalf, while also having the tools and resources you wouldn’t have in-house to recover these accounts. To find a reputable partner that can quickly and efficiently resolve your accounts receivable, it’s well worth the time and effort to do the research.
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