How to Choose A Collection Agency For A Small Business
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Depending on your situation you will want to choose weather or not to try to keep your business local or to find a large company that does business across the United states or even global. Small local companies may be able to customer that are individuals or if you have just a small amount of accounts. Costs for a small collection agency is usually less and you may be able to form a good business relationship with them, however they may not be able to offer as many extras, such as on staff attorneys. Larger more national collection agencies often do well when your business have massive amount of very large past due accounts. - 2). The first thing to consider when checking out a collection agency is their success rate, no matter how small or large the company is. However, for the most part the higher success rate the company hold the more you will be paying.
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Choose a company that focuses on business that is similar to yours. For instance if your business is health care based you will want to find a collection agency that focuses on health care. - 4). Do they comply with the Fair Debt Collection Practices Act (FDCPA)? The FDCPA insures that the collection agency follows guidelines in collecting debt and does not use abusive behavior to collect debt. Make sure every collection agency is officially licensed by the state your business resides in. Only do business with agencies that obtain professional certification.
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Ask for detailed information on the process the follow. It is very important to know how the customers will be contacted and how you will get paid. Also inquire about a notification letter they will send your customers of the over due account notifying them that they have a set amount of days until their account is sent to collections. This letter is usually sent free of charge and you will not have to pay a percentage of funds that are sent before that period of time. - 6). Ask for a trial period. If you have a large amount of collections that need to be done ask a couple agencies if they will be willing to do a trial run. Most companies will accept and be open to the challenge of beating out other agencies. You may then choose the company that colleges the most in the amount of days you sat.
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Compare pricing. A collection agency usually makes money by charging a percentage of the amount of debt they collected. Just remember the lowest rate does not mean the best value if they can not deliver. But just because a company charges a large rate does not make them the best, you most look at the price compared to the other values the company offers.
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