Tips For Hiring a Collection Agency

Collection agencies are valuable tools for business owners who need help recovering overdue invoices. Typically charging a percentage of the total amount collected, they can focus on finding and contacting customers who have ignored or forgotten to pay their bills and free up your team’s time to devote to running and growing your business. However, it’s important to note that a collection agency should only be used as a last resort after other attempts to collect the money you’re owed have failed.

How do collections make money?

When choosing a collection agency, it’s essential to find one that can work within your budget and is well versed in the process of debt litigation should the need arise. You should also ask if the collection agency offers a contingency fee structure, whereby the agency’s fees are deducted only from the money it actually collects for you. This way, the agency is incentivized to perform and minimizes your risk. Learn more :

Inquire about an agency’s experience with the type of business you operate and how many employees you have, as different collection agencies specialize in different industries and sizes of businesses. Additionally, make sure the collection agency carries Professional Liability insurance, as this provides coverage in case an employee of your client feels they have been treated unfairly by the collector and sues the collection agency.

Lastly, you’ll want to select an agency that is licensed to collect in all 50 states and has a robust compliance management system. This will ensure the agency is fully compliant and adheres to all state laws, and protects you if your customer feels they have been treated unfairly by the collections agent.

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