Debt Collection Agency – Tips on What to Look For

If you are running a small business, trying to make sure all of your clients pay can distract you from the job at hand. You need to be a salesman, a professional worker, an accountant, and be a debt collection agency, all in one day. Giving out some of your workload to professionals, may mean you have more than more time, and you will probably stay more focused on getting the job done.

Let’s face it, debt collection is a nasty, frustrating and a time consuming business. This is one area of your small business worth giving to someone else. The overall cost will probably be lower, not to mention the fact that you can spend more of your time on positive issues. By handing over debts to a professional organization to handle, you will also create a sense of professionalism towards those who are not paying you. Sometimes, larger companies will take advantage of you because you are a sole trader or operating a small business.

So how do you go about choosing? Here are some points you should be looking for in any professional agency.

Overwhelmed ???

• License. It is very important they have a license. You do not want to be held accountable for any of their actions. If you are accused of harassment, it could get very expensive for you. You will need to make sure they are licensed in your state, and other states of Australia. State laws will vary, and in a country like Australia, it is easy for a debtor to pack up and move on.
• Professional Association. If they are a part of some professional association you know they are not working alone, and they too have guidelines under which they operate. Spend a little time to investigate the association so you understand the validity. Some companies will put logos on their websites just to make themselves look more professional.
• Payment Terms. You want to know when you are getting your money once they have collected it. There would be nothing worse than not getting paid from a debt collection agency.
• Fees and Rates. Some companies will have a flat fee or retainer, but in more modern times, we are seeing more debt recovery services being offered on a ‘no collect, no fee’ basis. This is something you should be looking for. Check the proportion of your debt they will take, as their commission in this type of case, will normally be higher.
• Financial Situation. What will happen if the company you choose goes out of business? You want to make sure there are provisions for you still get the money they owe you. Some debt collection companies will be bonded and insured for this situation. Your money stays your money.
• Online Account Monitoring. This is something that will give you peace of mind, and a way to see what is going on for yourself. The better companies will have this and more. They may even have software to help you analyse and predict which of your debts will be easier to collect.
• Previous Customers. Look for customer testimonials. There is nothing better than hearing from their previous customers. Do some research into these testimonials and check for validity. Look online among forums to see what others are saying about them. Bad news travels fast.
• Experience in Your Industry. This is a factor that many will overlook. Debts are not all the same. The better the agency understands your industry, the better they can go about working on getting your money back.
• Representation. Remember, in effect, your debt collection services company will be representing you or your small business. You need to look at their philosophy and actual operations. You might be the one getting a bad reputation, and that could further damage your business.
• Additional Services. More than just collecting money, they should be able to provide you with ways to minimize this situation happening again, and point you in the right direction or provide legal assistance if a matter needs to go to court. Additional services is a good indication of their skills.

Operations. Finally, good debt collection services company will be working outside normal hours to recover your money, and you will have a way to contact them if something arises. Don’t overlook the level of dedication and service they provide you.

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