Any business can experience a collection problem regardless of its size. Despite trying your best in debt collection, you will experience clients who will not want to pay while other accounts fall past due. You can hire a debt collection agency to avoid this hassle and get things done at the right time and correctly. However, when selecting your agency, you must ensure one is ideal for your business. Besides, not every company establishing itself as a debt collection agency will deliver excellent services. Some are there solely to make profits. How do I choose the right debt collection agency? Here is what you need to consider.

Your Business’s Customer Base For debt collection agency

Are your customers businesses, consumers, or both? The type of customers you serve will significantly impact your agency selection. The agency you choose should specialize in collecting the kind of customers you serve for maximum efficiency. If you specialize in commercial services, a B2B debt collection agency like Atradius will be perfect for your accounts. On the other hand, you can find a consumer agency for consumer or personal claims. 

If you have a mixed portfolio, you can divide it or find a company that offers extensive experience for both.      

Technology

In the current world, your business cannot survive without implementing various technologies. With today’s availability and high-level technology advancements, you must select an agency that offers some online access. This way, you can perform multiple tasks, including running statistical reports, corresponding with collectors, and viewing your account’s status. Also, choose an agency that can customize services according to your specific business needs. 

Experience

You will need a debt collection agency that has been in business for an extended time to guarantee the efficiency and effectiveness of the services rendered. How much experience does the executive leading the business have in debt collection? What is their collection turnover? Asking such questions will help you determine if you have the right company or not. An agency with increased experience will likely handle the debt collection professionally and know how to better deal with issues that may arise along the way.

Financial And Legal Position

It is important to note that size does not necessarily depict strength. Middle-sized and small agencies could have more financial stability than bigger companies. When selecting an agency, you should consider their accounting practices in general. 

Also, ensure that your prospective agency is licensed by the respective local authorities. This will help avoid legal complications. Additionally, licensed agencies tend to perform better since they are up to the standard requirements. 

Location And Size

Typically, debt collection agencies differ in size, which include big multinational companies and small local agencies. When selecting your ideal agency, you must ensure its size and reach match your organization’s. For instance, a small debt collection agency will be perfect for a small business offering local services and goods. Alternatively, a multinational agency will be ideal for a company that does business internationally or nationally. 

Features Of A Good Debt Collection Agency

Just because you know how to get hold of the best agencies in town does not mean you can get the best ones. Unless you know the characteristics of a trusted and reliable debt collection agency, it will be quite difficult to find the best ones for you. 

Here are some of the most common characteristics that you need to look out for if you are looking for a debt collection agency: 

Reputation And Trustworthiness

Debt collection agencies that are worth the time of any organization should be trustworthy and must have a good reputation. When you are looking for a debt collection agency, you need to make sure that they have been a good part of the business for at least five years. 

A good debt collection agency will be able to protect the reputation, maintain impeccable customer relationships, and provide stellar services when it comes to handling your debts.

Positive Testimonials

When you do your research on a debt collection agency, you need to pay very close attention to all of their testimonials. 

You may go to their website to see if there is any page for testimonials, or you may just go to Google Reviews or visit their LinkedIn profile to see if their clients went through a satisfactory experience. 

Success Rate

Once you are done shortlisting all the options, get in touch with each of the debt collection agencies and talk to them about their success rate. They should have a pretty high success rate at a pre-legal stage for you to make a consideration. 

It is easy to have only lawyers who are collecting the debts for you. But that can be avoided, and it is more economical for the client, too. Legal action must always be the very last option if you are already dealing with an efficient debt collection agency. 

Consider The Fees

When the debt collection agency is of a standard, they will come up with manageable commercial rates. The fees need to be somewhere between 5 to 15 percent. Of course, this changes depending on the value, age, and type of collection work they need to do for each of the accounts. 

Though it is important for debt collection agencies to come up with reasonable fees, a low commission rate will not match up to quality or good results. Do not forget that you only get what you pay for, so do not look out for the cheapest option. 

Debt Collection Process

A debt collecting agency where the debt collectors are aware of what they are doing will definitely have effective and proven methods of collection. So, this is something you need to inquire about. 

Their methods of collecting debt, their techniques for getting faster results, how long they have been in business, their clients, etc., are all that you need to think about before recruiting them. 

The Bottom Line 

I am hoping that this article will help you find the best debt collection agency for your business. While there are a number of ways to do it, you must think about all the criteria and factors that make them the best choice for your needs.

Do not settle for any cheap option from the market. Look around, do your research, and only then make a decision that suits you the best.

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