How to Decide on the Right Debt Collecting Service
There is more than one kind of debt collecting service out there. Find out here how to pick out the right one for your needs.
So you did your job, and now it's time for them to pay you back. You've tried so many times to get your client to pay you. But, they hide or simply tell you they need more time to pay you.
When we land that first client, we never expect them to become our worse nightmare. Now the question is, what to do? You should hire a debt collecting service.
They can do that for you. So you can focus on your business and keep growing. Don't know how to pick the right debt collection services?
We've you covered. Read on to learn how to pick the right one for you!
Collecting Service: What You Should Know About Them
Not all debt recovery services are alike. That's why before looking for the company to hire, you should analyze your needs. What are your debt collection services needs?
How many of your client accounts are past due? Do you need international services? These are some of the questions that can point you in the right direction.
Knowing this information will make your search easier. Here are some of the criteria you should consider when choosing the right company to handle your debt collections:
1. Company Size and Office Locations
Before choosing the debt collection services company, you should research their size and locations. If you're a small business, you might be better off hiring a company that's similar to you in size.
Also, you've to keep in mind their location and servicing areas. Before hiring them, make sure they service the areas where your clients live.
2. What Services Do They Offer?
Keep in mind that not all debt recovery services offer the same services. Are they commercial or consumer debt collectors?
If your clients are consumers, you should hire a company that's used to do those types of collections. You need to have in your corner a debt collection services that know how to handle your client.
3. What Are Their Standards?
When the debt recovery service contacts your client, they'll think your business is contacting them. That's why the company you hire must follow the same standards you follow. If the company you hire doesn't treat your customer the way you do, you can lose future business.
4. What's Their Staff's Experience?
Before hiring the company, you should research their staff's experience. You should look at company managers, executives, and collectors.
Their staff will represent you. So you should hire the team that has the experience you need.
5. What's Their Reputation and Ratings?
You can't believe everything you see. But, you should check reviews for the company you're considering hiring. These can give you a better idea of the service they provide.
Also, you should check for their ratings and standings on agencies like the Better Business Bureau. Are there any complaints against the company? It's great news if the company doesn't have complaints and has good standings.
6. How Are Their Finances?
Check the financial condition of the company you're considering. Financial problems or inconsistencies can translate into them not sending you the money they collect.
Researching their financials is very important. At the end of the day, you want to make sure you'll receive that money they collect.
7. What Industries Do They Service?
Not all debt collection services are the same. That applies to the industries they serve as well. Some of these companies specialize in certain industries.
If you own a roofing company, you'll be better off hiring a company that helps collect debt in the construction industry. Because they'll have the expertise to deal with your client. You should try to hire a company that has experience servicing your industry.
8. Do They Comply with the Legal Requirements?
Every state has their own licensing requirements. That's why you should make sure the company you hire is licensed in the state they'll be collecting the debt. Make sure the company is insured and bonded according to the legal requirements.
If you need international collecting, you should hire a company that's experienced in that type of debt collecting. These types of collections can become complicated, so it's recommended you hire an experienced company.
9. How's Their Fee Structure?
Many business owners don't pay enough attention to the fee structure when they're hiring debt collection services. You might think the cheapest is the best deal. But, that doesn't mean they'll be able to meet your needs.
Some agencies use factors such as the age of the claim, and location to set their rates. You should take a look at their rates and balance them against their performance reviews. This way you'll know if what you'll be paying is worth it.
You should make sure the agency provides you a debt collection agreement establishing all the rates for the services. You should consider hiring a company that provides the highest rate of service.
Remember they're going to be in contact with your client. Yes, they might be past due on their invoices. But, you want to get referrals and future business from them.
10. Do They Use the Right Technology Systems?
Most business owners don't consider technology when hiring a debt recovery services company. Hiring a company that has the systems and processes you need is a must.
You should look for a company that can handle your claims volume and can keep your customers' information secure. Also, they should be able to provide you with comprehensive statistical information about the claims.
How to Choose the Right Debt Collection Services?
Choosing the right collecting service doesn't have to be a nightmare. You've enough with your client not paying you. To pick the right agency for your business, you must focus on finding a company that meets your needs.
Remember to consider the number of claims you expect, your clients, their standards, and reviews. You shouldn't only consider their rates when hiring debt recovery services.
The right company will be able to meet your needs and budget. If you use our guide, we're confident you'll find the right debt collection services in no time.
Want to learn how debt recovery services work? Check out our blog post to learn more.
Author: Hudson Piccini
Hudson Cynar, a Harvard University alumna and the owner of three prosperous enterprises, is a distinguished business consultant, author, and writer. Her expertise spans multiple business sectors, with a particular emphasis on storage containers, commercial copiers, payroll services, and medical billing software. Dedicatedly investing thousands of hours into product and service research, Hudson crafts insightful reviews to guide entrepreneurs in making informed decisions for their businesses.