To help ensure a successful collections outcome, make sure to establish good communication between you and your collection agency. Make sure to give the collection agency all of the information you have for your debtors (ALL contact information, detail transactions related to the amount they owe, etc.), and make sure to understand how all of their processes will work:
- how and when collected funds will be sent to you
- how payment will be made to the collection agency
- how to check the status of your account online
- how to stop further collections if you receive payment
The earlier you get your debtors into the collection process, the more likely it is that they'll pay, and the higher the percentage that you'll get back from the collection agency. Try to turn your debtors over to a collection agency whenever they reach 90 days past due, whenever you discover any financial difficulties, or whenever a customer demonstrates bad faith of otherwise loses credibility. Waiting too long can not only decrease the chance of recovering any funds, but you might run into a statute of limitations that would prevent you from recovering anything at all.
Make sure to read the collection agency contract or agreement to understand your responsibilities and those of the collection agency you choose. You need to understand the details in regards to not only pricing, but also items like what settlements you're willing to take, how payments will be handled, which party is authorized to be in contact the debtor, the length of the agreement, the cancellation policies, and so on.
Initially, you might want to consider trying multiple collection agencies. Since contracts or exclusivity is normally not required, it might be useful to try a couple different collection agencies to see how they will perform for your company. As you gain experience in dealing with each of them, you can start moving more of your business to the collection agency that performs the best for you. However, note that sending the SAME account to more than one collection agency is against the law.
Finally, we hope you have found the information in this guide useful. We understand that there is more to collection agencies than what is included here, and we suggest that you use this guide as a starting point in your search for the right collection agency for you. Thank you for considering Rapid Recovery Solution, Inc. for all your collection needs.
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