At some point of their operations, companies accumulate debts must be collected. Regardless of the company size, the collection of debts can be challenging especially if there is no internal collection department handling the task. Many companies don’t have dedicated staff to call, follow up and collect.
Businesses now realize that there are advantages to hiring collection agency in cases where bad debts have piled up. A small company engaged in the fashion business sees greater benefits in assigning debt collection to an agency. “Having a debt collection agency takes the headache off from our staff, and allows us to concentrate on our core business rather than worry about collecting these debts,” Ralph, the store manager explains.
Vivian, an importer/exporter of arts and crafts, has started to seek professional debt collection service to ensure that collection is managed and dealt with. “It definitely saves me the difficulty of discussing unpaid obligations with my customers personally, which can be uncomfortable at times,” she says. With an agency managing her collections, the customers are treated professionally and proper payment scheduling has been assured.
More than anything, having a debt collection agency saves on the salaries of in-house accounts receivable staff, and less costs incurred by the company in paying for additional remuneration in employing full time staff. There is also no need for the company to be familiar with the laws and regulations on debt collection as the agency takes care of this, and can comply with the requirements of the government agencies in charge of such operation.
But before hiring a debt collection agency, a company needs to look into the history and performance of the agency. How long has the agency been operating? Does the agency have experience in the industry or similar company? Does the agency handle the type of debts and amounts that the company has? Can it provide proof of its staff’s experience, like client testimonials? Does the agency comply with existing rules and regulations? How much does the agency charge? Is there a fee structure or commission option? All these and other concerns of the company hiring the services of a credit collection agency must be addressed before signing up the collection agency to handle the account.
