Collections Continued…

What to Look For in a Collection Agency

If your firm's course of action involves a collection agency, there are certain things to look for that may provide you with an advantage to choosing one firm or another. The first concern should be fees and payments. If your firm is already owed money from a client, it seems unfair that if that money is collected, the collection agency is going to take some it. Knowing that collection agencies have to make their money as well, one should seek out collectors that only charge a flat fee for their service. Some firms have been known to charge a percentage of the amount collected after the fact. Avoiding a situation like this will insure that most of the collected amount goes into your pocket.

Another item of interest to look for in a reputable collection agency is their recovery rate. Knowing just the percentage of delinquent accounts they collect should give a decent indicator of the service they can provide.

A third, important consideration should also be a collection agency's ability to report to the three credit bureaus. If persistent, delinquent accounts exist, it is your responsibility as a business to make this known to these agencies. The last thing a person with outstanding debts needs is more credit elsewhere.

Finally, working with a collection agency should be easy and simple. Your service has been given; your product delivered. It is now the responsibility of your customer to pay you for it. Making this collecting processing simple enables businesses to concentrate their efforts on new accounts and profits, where the future of the business lies. Isn't focusing on the future much preferred to fighting over the past? If your business says yes, a collection agency should be given its due consideration if uncollected monies exist.

By Jamie Ward