The 5 Ws of working with a debt collection agency
With late payment causing considerable damage to cash flows across the country, many businesses are turning to debt collection agencies for help.
Whilst some will see the process of outsourcing overdue invoices to a debt collection agency as a daunting task, it doesn’t have to be.
Here we share the 5 Ws of working with a debt collection agency to help you make the process as simple as possible.
Why: The value of working with a debt collection agency
Before you outsource any task it’s important to weigh up the pros and cons of doing so and analyse what value it will bring to your business. Some of the benefits of outsourcing overdue invoices to a debt collection agency include:
- Access collections expertise that will rival and eclipse in-house resources to bring results
- Regain time and resource to focus on newer invoices
- Peace of mind that aged balances are in safe hands
- Services are typically provided on a success-only basis so you only pay if your invoice is successfully recovered
- Avoid having to write off unpaid invoices
What: Deciding which debts you want to outsource
Some businesses will only outsource debts which are proving particularly tricky to collect, whilst others will outsource everything that reaches a certain age so that they can concentrate their efforts on newer debts.
As every business is different it’s up to you to decide which invoices will best benefit from the assistance of debt collection agency. These could be invoices of particularly high value, invoices that belong to a customer you simply can’t track down or maybe one with a number of invoices outstanding.
Whichever reason you decide to outsource, a good debt collection agency will understand that every debt is different and will work with you to decide the strategy that will achieve the best results.
When: The right time to outsource
When it comes to debt collection, timing can significantly change the results. Statistically, the sooner you outsource a debt the easier it becomes to collect. This is largely because as invoices age it can be harder to find the debtor or prove that the product or service was provided.
Where: Looking for debt collection agencies
Once you’ve decided what you’re going to outsource and when, it’s time to start looking for debt collection agencies that can take on the task for you. Often the best place to start your search is through recommendations from friends and colleagues. These references can give you a good idea of what it’s like to work with the company.
Alternatively, a search engine could bring other companies to your attention that you may not have heard of, but could have the required expertise to get your business the results it needs.
However, this shouldn’t mark the end of your search, with the fifth W the most important one to answer correctly.
Who: Choosing the right company to work with
Now you have a list of debt collection agencies that could work you need to narrow down the results and choose the company that will bring the best results for your business. Here are four important things to look for to find the perfect match:
- Expertise: Ultimately you want a relationship with a debt recovery agency that is going to bring results, so check that they have sufficient collections knowledge
- Recommendations: Look for success stories and testimonials to ascertain if they have a successful background
- Sector experience: Particularly with trickier debts, sometimes sector expertise can bring knowledge and results to rival a typical generalist
- Credibility: Check for affiliations with leading industrial bodies such as the Credit Services Association (CSA) to ensure that the agency maintains the highest standards
Now that you know the five Ws of working with a debt collection agency, it’s time to put it to work. If you have any overdue debts that could benefit from the expertise of a debt collection agency we could help. Contact us today on 0800 9774848 or email@example.com to see what we could do for your business.