Managing Collections and Hiring a Collections Agency

Sharon Boyd has nearly 25 years of experience between both the healthcare and marketing industries. In addition to being an RDH and content writing expert, she also holds a degree in business. Her responsibilities primarily include tackling the communication barriers between small business owners or healthcare providers and their prospective clientele.

Managing Collections and Hiring a Collections Agency

Part of any business venture is tending to the accounts receivable. For many businesses, most accounts are paid on time, so you only need to process the payments and update any files. But what do you do about the accounts that are delinquent for 30, 60, or 90 days or more?

Some offices will try to take care of the delinquent accounts on their own. But handling customers who are behind on payments can be a difficult job, one that is thankless and emotionally demanding. It can take up a lot of time that would be better used on other, more immediate tasks.

But hiring a collections agency is a daunting project if you don’t know what to look for!

What’s in a Reputation?

When you hire a debt collector, you shouldn’t just look at your bottom line; consider how the debt collector may affect the reputation of your business, especially if you sell services as well as a product. How the collector handles your clients will reflect back on you. Look for an agency with a high rate of return and a good reputation for handling customers as well.

Industry Specific

Your choice of collector should also be affected by the type of business you run. A landlord and a hospital have different regulations governing debt collection. If you choose a general debt collector, ask about their training and industry specific knowledge. How often do they update their procedures? Do they stay on top of industry standards and laws governing contact with delinquent account holders?

Contacting the Customer

There are two main types of contact that a collections agency will have with a customer whose account is delinquent: phone and mail. Different regulations guide each type of contact. While you research collections agencies, request to review their boilerplate letters. Find out what letterhead it’s on, how it references the debt and any mention of your company. Also ask to review their phone scripts to preview how they will be speaking to the client. You’ll need to determine what level of aggressiveness you want from an agency pursuing your delinquent accounts.

Accredited and Insured

In many states, a debt collector must be accredited or licensed in order to operate. There are specific guidelines to follow about who they may contact, and how frequently. When they belong to a professional organization, you may feel more assured of their reputation and expertise.

However, a final thing you should look for is how they are insured. No matter how well written their telephone scripts and letters are, it only takes one customer to make a complaint for fines to be levied and lawsuits filed. Make certain the agency is insured against bad faith and harassment claims.

It may take some research, but the right debt collector can help you deal with delinquent accounts so that you’re able to run a profitable business without raising the rates for other clientele. Make a thorough investigation of your top choices to assist your decision. You’ll be laying the groundwork for a partnership that will ultimately help your customers and your bottom line!