Owning a business or even managing one is a great deal of work. If you have to worry about bad debt recovery too, then it is a great deal more stressful. That is one reason why already having a collection agency for your accounts is helpful. An agency is able to focus on collecting the bad debts so that you can concentrate on running your business.
Some people feel that if they are a relatively small business, then a financial collection agency will not put forth the same effort as they would for a larger company. In order to make sure that you feel comfortable with an agency, you need to check them out prior to hiring one to recoup money owing on overdue accounts. Naturally, professionalism is a key factor when deciding on an agency to handle your collection accounts.
Although it is a stereotype, it is true that not all agencies have the best ethics and professional attitude. That alone is a good reason to ask for references and then be sure to check them out. And, of course, a good way to check on a company is through the Better Business Bureau; however, just because they are not listed does not mean that it is a reputable company. It can also mean that no one has bothered to file a complaint against them, which is another good reason for contacting their past and existing clients.
There are several questions you should ask when you are interviewing collection agencies, including whether or not they can collect locally, nationally and internationally, depending on what you need. Finding a collection agency for your company is imperative if you have customers who have defaulted on their accounts. Since many of these companies specialize in different forms of collections, make sure that they are able to collect as a commercial collection agency if you handle any commercial accounts.
Locating debtors, or skip-tracing individuals, is something that most collection agencies offer, as well as just collections. However, they will charge more depending upon the services that are needed, so you want to be clear about any additional charges that may be incurred while handling your bad debt collection issues. Be sure that they are clear on the fact that any charges over the agreed amount need to be approved by you first. The better collection agencies will offer ongoing support and professional services, as well as offering you a point of contact that is familiar to you and your business.
Does the collection agency for your accounts provide detailed status reports that keep you updated on all of their collection activity? The collection agency should provide you with reports on a regular basis, yet the frequency of those reports is pretty much up to you. Most companies request 2 or 3 reports a week and with the internet, companies have started offering 24/7 digital collections reports, available online. Some companies even have collection attorneys available for legal advice, etc.