Fairway Capital Recovery Blog

5 Simple Steps to Get the Most Out of Your Collection Agency

Posted by Matt Alkire on Fri, Jul 26, 2013

When partnering with a collection agency, it’s important for you to be proactive to ensure you get the most out of the relationship. What does “getting the most” mean? It will vary depending on your business, but it could mean: 

Get the most out of your collection agency

  • Collecting more funds
  • Dealing with less hassle
  • Improving your internal accounts receivable processes
  • Increasing customer retention
  • Staying in compliance with laws and regulations
  • Benefiting from an ongoing, successful partnership

If you are interested in any of the above benefits, follow these five steps to get the most out of your collection agency:

Step 1: Communicate your needs

From the very start of your relationship with your collection agency, communicate your needs clearly and specifically. Talk to them about your motivation for partnering with a collection agency. Is it legal compliance? Professional customer service? Collecting more of your aged receivables? When they have a solid understanding of your wants and needs, they can better serve you. Continue to communicate with them openly, so they can adapt as your needs change.

Step 2: Start with “clean” accounts

Set your agency up for success by providing them with “clean” accounts receivable data—make sure all customer information and balances due are correct and well-documented. Documentation is important because without it, collectors cannot be successful. For example, let’s say your records show that your customer, Molly, owes $250. But when the collector calls Molly, she claims she only owes you $150. Without receipts or documentation to back up your claims, your collection agency will not be able effectively collect from your customers.

Step 3: Build relationships

Meet and develop relationships with the key people working on your accounts. This will facilitate the kind of open communication that is necessary for a successful working relationship. Talk to them about their progress on your accounts, what they can do better, what they might need from you to work more effectively and any other questions you might have. Building relationships will also keep you top-of-mind with your agency, motivating them to do their best work for you.

Step 4: Trust the agency to do their job

Once you hand over your accounts to the collection agency, it’s important that you trust them to do their job, ensuring the maximum amount of funds are collected. For example, let’s say a collection specialist calls your customer, Sam, and engages in a discussion about paying his debt. When Sam calls your front-desk receptionist and tries to work out a payment plan with her, she should avoid the temptation to negotiate with him. It’s likely that your receptionist is not a trained collections professional, or you probably wouldn’t have hired an agency. In this situation, she should explain that the collection agency is handling his account, it is out of her hands and would he please contact the agency to talk about his debt. After you have given an agency your accounts, it is imperative that the agency—and the agency alone—work those accounts.

Step 5: Monitor progress

Be proactive in reviewing progress reports and remittance statements, so you can track the success of your agency’s efforts. Discuss reports with them, and rely on their expertise to analyze the current process and make suggestions. Communicate with them about concerns you may have, so any issues can be resolved quickly. Keeping track of progress and being vocal about questions helps ensure that funds are being collected as effectively as possible—resulting in more money flowing back to your business.

Your organization is counting on you to take ownership of the collection agency relationship. Following these five steps will help you maximize that relationship, deliver results and ensure a successful partnership for years to come.

 

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Topics: collection agency, outsourcing debt collection, debt collection services, Hire a collection agency, collection agency tips