As your small business grows, you’ll be dealing with a larger audience and more customers. You can’t guarantee they’ll follow up on their end of the bargain with monthly payments, overdue fees, etc. When this happens, you may notice a hiccup in cash flow or budget. In order to safeguard your company against getting caught up in a payment mess or wasting time following up with every delinquent customer, it’s smart to hire a collections company. However, before choosing a collections company, it’s critical that you first consider these 5 tips.
5 Tips for Hiring the Right Collections Company
Be In the Right Niche
If you’re in manufacturing, your needs may be much different from that of a retail store or leasing company. Thus, it’s important that the collections company you choose is able to work with customers in your niche. To assess this, there are a couple questions you want to ask.
• What is their success rate in collecting the debts in this type of business? If they are established and professional, they should be able to provide you with that information.
• How much experience do they have? If you are their second company in this niche, you may want to steer clear. Asking this question will also ensure that you don’t get involved with a come-and-go collections company which has become more common.
Know Their Debt Collection Approaches
While the idea of debt collection is pretty simple, there are a number of approaches that are detailed and structured in order to reclaim the money you are owed. To choose the right agency, be sure they utilize a number of tactics, all of which are in line with your business’ values and morals.
Ensure They Are Accredited
Collection companies are ruled by a number of legal obligations. Because of this, you want to be sure that the one you choose is certified to be collecting these debts. This not only ensures that you are working with a professional collections company but, as a reflection of your business, will allow you to rest easy knowing your customers are in the right hands.
• Geographic licensing: Licensing can vary from state to state, and they should be fully certified for their geographic area and the ones your customers are in.
• Professional memberships: Nationally, they should belong to the Association of Credit and Collection Professionals, where they are required to follow a certain code of ethics.
Get Personal Recommendations
The best way to find a collections company to work with is to ask around; there are a number of ways to do this. Still, regardless of your method, you want to know your requirements and seek out recommendations and reviews for those specific aspects. Consider your two main options.
• Friends: If you have friends within your niche or the business field, be sure to inquire about their preferred debt collectors. Friends have nothing to lose by giving you an honest opinion.
• Online reviews: While sifting through reviews can be time consuming, it’s a smart way to get an idea of what each agency can do and who is most commonly used within your niche.
Inquire About Company Practices
Choosing a credit agency is like hiring a new employee at your company. It is someone you will be working closely with that you’ll need to trust with outstanding debts important to your company’s financials. There is one main aspect of the collections company you should be concerned with.
• Hiring: Each person hired should go through a background check. There could potentially be a significant amount of money at stake, and you want the right people working to get it for you.
Collecting your own debt can be expensive and time consuming, thus, choosing the right collections company is critical for your business. Be sure to ask the right questions and cover all your bases before making the decision.
This guest post is provided by Jessica Sanders, an avid small business writer touching on topics that range from social media to debt management and basic accounting. She is a professional blogger and web content writer for ResourceNation.com.