A lot of business owners have a difficult problem to face at one point or another – a client who doesn’t want to pay their dues. If you are in this kind of unfortunate situation, you can do two things. One is to write off the debt, which can be painful to your business, or two, hire a collection agency service to do the dirty job. However, there are business owners who are doubtful whether turning their clients over a certain collection agency service because they are scared that the actions of the agency that they have chosen might ruin their reputation.
Here are some important questions that you should ask collection agency services before hiring one:
Do you have certification?
Make sure to choose a certified collection agency service. Legal collection agency services are members of the Commercial Collection Agency Association and they are the only agencies that are certified by Commercial Law League of America. They passed strict requirements in order to get their certification. A collection agency service should have at least 5 employees, collected claims for a minimum of 4 years and must comply with federal laws about debt collections such as Fair Debt Collection Practices Act and should comply with licensing and registration laws. It is essential to request the agency for their certification to ensure that they can do the job appropriately.
Do you have license to operate in all the states?
Remember, a collection agency service that is licensed in your state may not be licensed to operate in other states. It is important to consider your client when it comes to choosing a collection agency service. If your client moves to a different state where your chosen service is not qualified, it would cause grave legal implications on you as their client.
How many years have you been a collection agency service?
Knowing how long have they been in the business is also a crucial question to ask. If the agency has been established for a long time, their experience will be more extensive. They will be able to provide a reputation of reliability and this will show if they have the ability to remit the money on time. Furthermore, it is recommended to scale the collection agency services you like with the wider market. .
How much do you charge?
A lot of collection agency services charge based on the sum they collect or a contingency fee, which will be based on the volume and age of your receivables while a lot of agencies will charge higher based on the debt’s size. Make sure to ask about the agency’s contingency cost and other fees they require.
Do you work in my niche?
If a collection agency service focuses in your niche or industry, it means that it is already knowledgeable about all its details. Also, make sure to ask the number of clients they have worked for as well as their recovery rate. In order to find services that focus in your industry, it is recommended to ask help from professionals such as accountants and lawyers. For referrals, you can also get in touch with your trade organization.
After getting all the answers to your questions, you may still be uncertain to hire the collection agency service because you are worried about the entire process. This is why you also need to know how long the process usually takes and what details you need to present to get started.
Author Bio: Sandeep writes SEO articles, which have appeared in various company websites and e-zine sites. He specializes on instructive articles on collection agency services. Read more about her articles, you may visit www.commercialcollectionsfirm.com.