Outsourcing Your Commercial/B2B Collections? Don’t Hire a Debt Collection Agency Before Asking These Important Questions!

choosingLets face it; the economy is still in rough shape and many businesses are struggling to get by. This has inevitably led to an increase in delinquent commercial and business-to-business related debt, and rising bad debt expense is putting added pressure on many of today’s businesses. To combat this financial pressure, a lot of companies are outsourcing their overdue accounts to 3rd party collection agencies – agencies that have the knowledge and expertise necessary for collecting in today’s business environment. If you are one of the many looking to hire an outside collection agency but want to be sure you find the best agency for your business, here are the important things to know, and questions you need to ask before making your selection:

Who are your collectors? Who will actually be interacting with my clients?

Just as you wouldn’t hire a new employee without knowing if they’re qualified for the job, you shouldn’t partner with a collection agency without having a strong understanding of who makes up their collection staff. When deciding whether or not to hire a prospective collection agency, remember to ask these questions upfront:

• What are your hiring policies? How much prior experience and training do you require of your collectors?

• Does your agency invest in employee training, industry education & continuous staff development?

• How can I be sure your collectors comply with all laws and regulations? Are they trained on the FDCPA?

• Are collectors incentivized to provide quantity or quality collections?

• Are the interests/goals of your collectors aligned with those of my business, and will they provide a high-quality collection experience?

In today’s economy, maintaining positive relationships even with delinquent and slow paying clients is crucial to any business’ success. And remember, the collectors that come with the agency you hire are essentially becoming part of your staff. But by asking these questions you can be sure to align with a collection agency you can trust and that your valuable business relationships will be preserved throughout the collection process.

What are your collection methods?

Before outsourcing your commercial and business-to-business collections to an outside agency, be sure to have a strong understanding of the agency’s collection strategies and techniques.  A few of the critical questions to ask are:

• How do I know your collectors will treat my clients and business partners in the same manner I would?

• What steps do you take in recovering delinquent debt? What is your collection process?

• What bigger, better, more efficient recovery methods can you offer?

By having a precise picture for the prospective agency’s collection processes, you will be much better equipped to decide if they are the right fit for your business. A few other important questions to ask before making a final decision on an outside collection agency are:

• What knowledge of best practices in the commercial and business-to-business collections industry do you have that we don’t?

• What kind of reporting capabilities does your agency offer? Will I have a clear understanding of my outstanding accounts?

• How can I measure your collection performance?

Minimizing your bad debt by maximizing recovery rates through the services of an outside collection agency could be the necessary step for maintaining your bottom line. But doing so can only be achieved by partnering with an agency that is properly aligned with your business. By asking these critical questions, you will not only find a collection partner you can trust, but one who will effectively recover your delinquent debt while maintaining the valuable business relationships that drives your success. 

YOUR TURN: What else goes into finding the best collection agency for your business? Did we forget any of the other crucial questions to ask before outsourcing your collection efforts? We want to hear from you!  

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