How to choose a debt collection agency
Unpaid and overdue invoices. Sound familiar? Unfortunately, these are not uncommon problems for businesses, and the current economic climate is only likely to make them more prevalent.
No matter what kind of business you’re in, there will always be some customers that won’t pay their bills. You send invoices that are ignored, make calls that aren’t answered, and excuses? You’ve heard them all.
When one business falls into financial distress or fails to pay its invoices for any reason, a knock on effect is triggered. Any suppliers or businesses working with them will be impacted when their invoices go unpaid, and the longer those businesses go without payment, the greater the effects will be.
Using a debt collection agency can be a big help for companies in combating late payment, generating more time to focus on growing and nurturing their business.
7 indicators that you should hire a debt collection agency
- New customers do not respond to your first attempt to collect the debt.
- You’ve agreed a payment plan, but the customer does not continue to meet the payments.
- A customer completely denies responsibility for the debt.
- The customer complains about your business, product or service as an excuse not to pay.
- The customer has a long history of being financially irresponsible.
- You find yourself spending too much time on a single customer, often to the detriment of others
- You have reason to suspect that a customer is unable or unwilling to pay their invoices
If you’ve decided to hire a collection agency, it is important to do your research first to understand what separates the good from the bad. It is also important to find a collection agency that is experienced, professional and familiar with your industry. Not every agency will be a good fit!
7 things to look for when choosing a collection agency
- Ask for referrals. A friend or trusted business associate in your industry may have had previous experiences with a firm you could use. Similarly, check out the success stories or testimonials on the websites of the agencies you’re looking at.
- Research. Take a look at their website and online presence, what are they promoting about their services and do they look credible?
- Pricing. Does the company offer transparency throughout the collection process, and base their fee on whether the collection is successful? How does their pricing compare to other agencies on the market?
- Speak to the agency. It’s always a good idea to pick up the phone and talk to the agency about your problems, ensuring you know exactly what the processes would entail. They will be able to tell you how they could make your life easier.
- Trust. Does the agency listen to your requirements, and offer a portal service where you will be able to log in and track the progress of your re-payment?
- Don’t worry too much about size. A large, national firm is not necessarily a better fit than a smaller, local one. It depends on your needs, the agency’s strengths, its reputation and its track record.
- Accreditations. Is the agency a member of the Credit Services Association, or authorised by the Financial Conduct Authority? Have they won any awards?
If your business has been impacted by late payment, we could help. Contact our team on 0800 9774848 or firstname.lastname@example.org to see how we could work with you to ensure you get paid. If you would like to find out more about us, please view our success stories and accolades pages.