What Do I Want and Need from My Collection Agency for My Business?

Getting paid is only part of the reason most businesses work with a collection agency. The right agency should help your business recover money, protect customer relationships, control costs and make your accounts receivable process easier to manage.

When a customer doesn’t pay an overdue invoice, you the business owner have a problem that goes beyond the money sitting on the books. And you’ve probably experienced this. Someone on your team has to make the calls, send the letters, follow up, keep up with documentation and figure out next steps.

And whether you’re working these accounts in-house or with an agency there’s a bigger concern.

How will my customers be treated?

Many business owners and operators want to know more about hiring a collection agency.

Here’s what you should be considering when hiring an agency for your organization.

I want my business to get paid

Recovering the money you’re owed is pretty obvious. So let’s start with that.

You’ve decided to hire a collection agency because you have money owed to your business and those internal efforts have been ineffective. You’ll want an experienced professional to pursue those accounts with an overall goal of improving the chances of getting paid.

A reputable collection agency should have a systematic process for contacting consumers, following up on accounts, documenting every activity and strategies for next steps.

Is your first goal to get paid? Absolutely. But that shouldn’t be the only measure of success for the collection agency.

I want my customers treated with respect

The consumer who owes your business money isn’t necessarily a bad customer, or person.

Oftentimes, your customers are experiencing a temporary financial difficulty. They may have also overlooked an invoice due to poor systems in the household. Many may also have a dispute that needs to be resolved and they’re just hesitant to contact you about that issue.

You do not want a collection agency treating your customers as adversaries.

Your business should work with a collection agency that understands diplomatic collections are effective collections.

Professionally trained collectors who conduct respectful communications can help preserve the relationship you have worked so hard to build while still making it clear that the balance needs to be resolved.

If you want to keep your customers, work with a collection agency that lives and breathes this concept.

I want a collection agency that represents my business well

It should be no surprise that when a collection agency contacts your customers, they are speaking on your behalf. That means professionalism is critical.

You should expect the collection agency you’re working with to communicate in a way that matches the reputation and values you have built.

This is especially critical in small business debt collections. You may be serving a small region and reputation certainly matters.

Remember, the collection agency you choose isn’t just an outside vendor. It is an extension of your business, your brand and your reputation when communicating with your customers.

I need a cost-effective collection agency for my business

The cost of debt collections is understandably a major concern, especially for a small business.

Business owners and operators do not want to pay excessive fees to recover money that is already owed to them.

You should ask your collection agency, “What am I getting for the fee I am paying?”

The answer is that you should get a straightforward, transparent fee structure. These may be upfront costs, contingency fees or a low-cost debt collection solution.

You should understand what recovering your money is going to cost you and resources.

I want to know what’s happening with the accounts I have placed

Business owners and operators should not have to wonder if any activity happens once you enter an account into collections.

Timely communication and reporting are very important to your business.

You should know how your accounts are progressing, what payments have been received, whether customers have engaged with the agency and what payment plans have been set up.

That’s why a proprietary online portal that allows you to check account activity 24/7 is important to your debt collection strategy.

I want a collection agency that understands my business

Medical collections may not have the same circumstances as debt collections for a lawn care company. For example, medical and dental collections have other considerations, such as co-pays and insurance.

There is also commercial debt collections which often carry a larger balances.

Choosing a collection agency that understands your business and your industry is a smart move.

I need a debt collection partner, not just a vendor

Ultimately, this is what many business owners and operators are really looking for. They don’t want a company that just takes a list of overdue accounts and makes phone calls.

Businesses of all sizes want a debt collection partner that understands the critical importance of cash flow, customer relationships reputation, professionalism and compliance.

The right collection agency should strengthen your business for the future, not create new challenges for you to manage.

What Should You Look for in a Collection Agency?

Before choosing a collection agency, ask questions such as:

• How does your agency treat customers?
• What is your fee structure?
• Are there upfront or additional fees?
• How often will I receive updates?
• How easy is it to submit accounts?
• How much experience do you have with businesses like mine?
• What happens when a customer disputes an account?
• How do you protect the reputation of the businesses you represent?
• What can I expect from the collection process?
• Who will be my point of contact?
• How do you determine when additional collection action is appropriate?