Even if you do a great job researching potential new clients and have excellent paperwork and contracts, it will happen. Sooner or later, a business will stop paying you. If another business has owed you money for 90 days or more, there’s already a good chance that you won’t be able to recover the money you are owed. So, it may be time to seek help from a commercial collections agency. There are a wide variety of questions you could ask a potential agency to make sure that they are a good fit, but there are three questions you must ask!
1. Do you specialize in commercial collections?
Commercial collections refers to money that one business owes another. Because laws and regulations around commercial collections differ from those surrounding personal, or retail, collections, it’s important that you hire an agency that specializes in commercial collections. If you have a specialized industry, you may also want to see if the agency has worked in your industry before. Make sure to ensure that the agency is accredited and current with the latest laws and trends in commercial or corporate collections. Some positive indications about a collection agency are if they have a good rating with the Better Business Bureau and great online reviews at Trustlink and Google. It’s important to note that you should not put to much trust in sites claiming to be “collection agency review sites,” as many are actually paid advertising sites.
2. What is your collection philosophy?
Most collection agencies can be classified as either “firm and professional” or “forceful and intimidating.” If your hope is to maintain good relationships with those that owe you money, and you have any concerns about publicity, you most likely want a company that behaves in a firm and professional manner. It is possible that the forceful and intimidating approach may be right for you if that fits better with your company culture or clientele.
3. How will we communicate throughout the process?
There’s not necessarily a right or wrong answer to this question, but since communication problems are often at the root of debt problems, you don’t want to try and solve one set of problems by creating another. Before asking this question, give some thought for yourself as to how you like to communicate, and how often you want updates. The agency’s reporting procedures should be clearly defined, and available in writing.
In addition to these questions, always make sure to request references, and to ask those references how successful the agency was, how easy they were to work with, and whether the company received any complaints from those the agency collected from.
Often when you hire a collection agent, you’re already feeling somewhat emotional or stressed. It’s important not to let your frustrations about chasing down the money, or your anger at the overdue client cloud your judgment when it comes to choosing the right collection agency for you. Take time to ask good questions and choose an agency that can represent you, and get you your money!