Making sure you choose the right partner
Chasing late or non payers can be a time consuming, costly and often challenging task. Even companies that manage this internally often don't have the time or resources to fully focus on it. Taking on a Debt Collection Agency (DCA), specialised and solely focused on recovering your debt can help you fulfil this critical task.
Once you've made the decision to outsource, it's key that you find the right agency for you. But with an increasing number of debt recovery agencies registered in the UK, making the right choice can be tricky.
Here's what I believe you should look for when choosing your agency;
Reputation
When you take on a DCA they become an extension of your brand. The way they act and communicate on your behalf will reflect on you so you need to choose one that collects your money in a professional way so as not to damage your reputation. It's imperative that the agencies you shortlist are members of the CSA (Credit Services Association) whereby they sign up to a legal and ethical code of conduct.
Portfolio of services
Many DCAs offer additional services to the core Collections such as tracing, litigation and enforcement. Check which are going to be relevant to you and see if any offer something unique to them. For example LRC offer a unique on line Debt Manager solution that allows you to look at your cases 24/7 so you maintain control.
Cost
Look at the fees you'll be incurring compared to the amount you're looking to recover, does it make economic sense? Be wary of too low costs - if the commission is too low, how are they actually able to afford.
Methods of collection
If your agency is CSA member than you can expect professionalism. But debts in some industries are more sensitive than others and need to be handled differently. So make sure they have experience in your industry and ask to see what their methods are and examples of communication.
References
Most DCAs should be able to provide you with references for you to follow up and don't be afraid to request copies of licences and certificates.
Pay them a visit
It's always worth visiting an agency and seeing their operations. Check that they are adequately resourced to handle any additional business you may send them. If they're a large agency but you only have a small number of cases, what assurances do you have that your accounts will be given the priority they deserve.
I always recommend you undertake a benchmark exercise whether it be against an internal collections department or another DCA. Just remember to ensure your cases are like for like.
The simplicity of outsourcing this challenging but critical function of any business and taking on the services of a DCA is fast becoming an integral part of an organisation's credit management strategy.
For more information contact Andrew Newsome, Legal Recoveries & Collections. andrewnewsome@legalrecoveries.com.
