As a business owner, you probably already know just how difficult it can be to collect on client debts. What makes it even more complicated is that there are laws in place to protect debtors, and you (or the collection agency you hire) have to carefully abide by these laws in order to avoid finding yourself getting sued in court!
Because of the risk involved in debt collection, it’s highly advisable that you hire an outside debt collection firm to handle it for you. Just make sure that it’s a reputable company that you can trust! Some companies care only about making a profit and will resort to all kinds of tactics, some of them illegal, which could get you in trouble and ruin your reputation, as well as your relationship with clients.
To protect your business, only work with licensed agencies that can legally operate in the state! This will ensure that they are abiding by all of the debt collection laws that are applicable in your state.
Also choose businesses that are insured, just in case something goes wrong, and that are capable of handling ALL of your debt collection needs. The last thing you want is to have to deal with several different agencies (what a hassle!) as you try to collect on debts.
You should also be fully aware of the company’s fee structure before you agree to work with it. Some companies charge you for every dollar they collect while others work for a flat amount. Neither option is right or wrong, but you should take care to choose something that will work for you and your budget, and you should definitely know what you’re going to be expected to pay ahead of time so that you can avoid nasty surprises!
It’s also a very good idea to work with a collection agency that allows you to view your accounts and their success rates online. This will make it so much easier to keep track of what’s going on and to see how your collection agency is performing.
As long as you follow these tips and work with only the most trustworthy debt collection agencies, you should have a very pleasant experience dealing with a collection agency, and you will likely find that they make your life so much easier and give you more time to focus on other things that matter for your business!