Choosing the right commercial collection agency is a tricky step to take, especially with the number of agencies there are. It’s an important decision; in order for the partnership to work, you must turn over confidential information about your company and your customers, which means you must know that the agency has the integrity and capability to handle your collections.
Where do you start?
To know which questions to ask, start by determining what factors might be holding you back from using a collection agency. The unanswered questions you have about collection agencies in general are often the best questions to start your screening process.
- Is your agency licensed and bonded? Many states do not have requirements for commercial agencies. It is important to know that your asset is protected with a bond.
- Do you have experience working in my industry? If the agency has worked in your industry before, they are more likely to understand the intricacies and common practices of your market, which means it’s more likely they will be able to collect on your outstanding debts. It’s okay to ask how many clients they’ve worked with in your field and what their experience has been.
- How will you communicate with me? Find out how this agency delivers information to you and your accounting department during the collection process. Make sure their practices and habits meet your expectations, and make sure they are aware of how frequently you want to be updated — whether it’s every step of the way or just at the conclusion of the process.
Most important: What are your certifications?
It’s imperative that you verify the certifications of the commercial collection agency you’re screening. When you partner with a collection agency, you trust them to work as an extension of your business, so you want to make sure they will represent you well.
If the agency is a member of an association like the Commercial Collection Agencies of America, they will have passed rigorous legal requirements. As a certified member of an association, a collection agency:
- Carries a minimum of $300,000 bond coverage for your business’s protection
- Meets all the requirements to be a certified commercial collection agency and adheres to a strict code of ethics
- Has been in business for at least four years and has met the continuing education requirements of this industry
- Acts professionally and remits timely
Partnering with a commercial credit collection agency is an important decision. Knowing the right topics to cover during agency screening will help ensure you’ve picked the best collection agency for your business.