Oh no! A large number of consumers are running late on payments again, and your cash flow is running low. This is becoming more common, even as the economy is recovering. Your company doesn’t have the time or personnel to follow-up, skip trace, call, and monitor all of these accounts. You start thinking about outsourcing your delinquent accounts, but you don’t know where to start.
Credit Control knows it can be a long, overwhelming process. You want to make sure you find a collections company that is cost effective, compliant, financially stable, and responsive. Here are a few tips to remember when making your decision:
Find one that knows your industry.
Not every collections agency deals with the same industries. Some focus on financial institutions, some on healthcare accounts, others on, education, utility, or commercial debt. There are dozens of industries that need credit collection services, so make sure you search out ones that will fit the needs of your company.
Just because someone in your industry network recommends outsourcing to a certain debt collections agency doesn’t mean it’s the right fit for you. Look into a few different ones both nationwide and in your area, ask questions, get to know the people you who work there—they’re the ones you’ll be working with. Create a Request for Proposal (RFP) and send it out to different databases to get pricing from suppliers in your industry. Ensure that you fully and accurately describe the scope of services you are in need of to receive the right vendors. RFPs are a good place to request due diligence items such as financial statements, references, historical liquidations and recent audit results. By going through this process, you will confidently find an agency that is in alignment with your company’s values and that will be timely, responsive, and effective.
Don’t judge a firm by its size.
Large firms can be tempting. Obviously it means they’re the best, right? That may be the case for some, but bigger doesn’t always mean the best in the collections industry. There are plenty of smaller firms that can give you the same quality service with a more personal business relationship. Credit Control, a top St. Louis collection agency, is considered a small business and is a certified Minority Business Enterprise (MBE), but we use state of the art technology to ensure data security, maximize returns and focus on client services. With that, we are able to maintain good business relationships, consistent growth, scalability, and financial stability. There are pros and cons on both sides, so make sure to take everything into account.
A long history means a lot of experience.
If a company has been around for a while, it’s likely they have a lot of experience in their field. This can mean a familiarity with unique collection procedures and regulations of different industries served, providing your company with the best returns. Well-established companies, large or small, have usually created a reliable system of collections that has been nearly perfected. These companies are able to keep up with regulatory changes with innovative technologies and evolving processes without disrupting current operations. This means they will be efficient, timely, and compliant.
Financial Stability is crucial.
Over the past few years the collection industry has greatly contracted due primarily to agencies not having the financial means and stability to withstand the ever changing compliance requirements necessary to collect past due receivables. This makes confirming the financial stability of an agency even more essential to your decision process. During the due diligence process, be sure to ask for the company’s financial statements, how their management system operates, and auditing practices. If an agency is audited both internally and externally, there is a high probability their processes are compliant with all regulations and industry standards. Look for growth and a solid foundation to ensure the company will survive the length of your contract and won’t leave you without help.
Don’t underestimate the importance of technology and security.
In today’s digital landscape, the need for data security is greater than ever to prevent hacking and information leaks. You want an agency that can keep your information as secure as possible. Look for up-to-date technology, security measures at all levels, and evidence of their compliance reputation and auditing practices. Credit Control is HIPAA compliant, PCI Level 2 compliant, and staff are monitored to ensure full compliance with client work standards, as well as all federal, state and local laws and regulations. We are also rigorously audited by external entities and conduct internal audits on a regular basis.
The little extras add up to make a huge difference.
Choosing a collections agency is a lot like hiring a new employee—there may be a few who are highly qualified, so you have to go beyond the initial criteria and look at the extra value they might provide. What kinds of additional services do they offer? Do they do pre-collect / first party, warehousing, skip tracing, or legal letter programs? Do they have any accounts receivable management services you may be interested in? Whether you need these or not, these are good to review. Not only do they provide flexibility and show competence, but you never know what services you may need from them in the future.
Look for licenses, certificates, and accreditations.
If they’re really good at what they do, there will be something to prove it. Licenses, certifications, and accreditations are good indicators of a successful, compliant company that will get the results you need. It means they’ve done the work to get noticed, and follow policies to maintain what they’ve earned. One of the most notable affiliations in the collections industry is with the Association of Credit and Collection Professionals (ACA).