Questions to ask before hiring a debt collection agency
Having a large number of accounts receivables can be difficult for any business. If you are a business owner and you find yourself in this position you may be frustrated at the amount of cash that you could have if you could just access it. Because of the time consuming nature of collecting on accounts receivables it can be beneficial to hire a debt collection agency. This can help the business maintain a better cash flow and avoid the possibility of serious business finance problems. However, there are certain questions that you should find the answers to before hiring someone to collect your accounts receivables. Knowing this information can help you to hire the right agency. Here are questions to ask before hiring a debt collection agency-
- What is their method of recovery?It is important to understand that each debt collection agency will have a different method for collecting. It is important to make sure that you understand exactly what that is and how it works. You want to feel totally comfortable with the methods that they will use and make sure that they are totally legal. Remember, that your business could be held legally liable if the debt collection agency crosses the line. If for any reason the debt collection agency is hesitant or refuses to give you that information then it is best to move on to consider hiring another agency.
- What do they charge for their services?It is also important that you take the time to shop around. A debt collection agency usually charges a percentage of the debt that they collect. However, there could be other fees as well so you should make sure that you have a clear understanding of the total cost. You want to make sure that you are getting the best deal possible. In addition, you should also make sure that you have calculated the cost of hiring a debt collection agency against the cost of recovering the debt yourself. This way you can make sure that you are choosing the most cost effective solution for your business.
- What geographically area will they cover?Most debt collection agencies only cover a certain geographically area. If you want them to collect debt that is outside of that area they often will-for an additional fee. The key to hiring the right debt collection agency is to make sure that they can and will collect in the area that you will need them to. Keep in mind that it may take some time to find the right agency, for the right location, that will charge the right price. Finally, keep in mind that many debt collection agencies also specialize in certain industries so it can be helpful to find one that has worked in collections for businesses that are similar to yours.
- What sort of referrals and recommendations do you have for a particular agency? When you are considering anything that has to do with your business finance it is important to thoroughly check it out. This is especially true when it comes to hiring a debt collection agency. You want to choose a debt collection agency that comes highly recommended and has plenty of referrals for you to check out. You can check with the Better Business Bureau for recorded complaints and it can also be beneficial to talk to other business owners, as well. Other business owners can let you know with candor whether working with a certain debt collection agency was worth the time and money or not. Finally, do not sign a contract until all of your questions have been satisfactorily answered and you feel good about hiring them.