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Aug 17 2018
Debt Recovery

The ultimate checklist when choosing a collections agency

Before you choose a collections agency to work with you need to consider the important factors and ensure they have the right record, reputation and license to operate. Here we explore the ultimate checklist to follow when choosing a collections agency.

1. They meet the licensing requirements and are properly certified

Most importantly you need to ensure that the debt collector is licensed, certified and legally allowed to operate in collections.

2. They are fully insured.

You should expect a minimum of £1,000,000 of professional indemnity insurance just in case something goes wrong.

3. They are able to collect debts internationally

Having a global reach and an understanding of debt collection in a wide range of territories is important. You will often find that debtors leave the country or keep their cash elsewhere, meaning that this ability is vital in recouping losses.

4. They have good references

You should also ask to see references from previous arrangements that they have held. You should look for solid, reputable and verifiable references that can assure you they are capable of completing collection jobs professionally.

5. They follow policy and guidelines for correct collections practices

It is important that the debt collectors do their collections by the book. While it is not your company carrying out collections, it is your company that will be tarred with the same brush as the collections agency.

6. They have a regular remittance procedure

Remittance practices can vary massively so it is important to know when you will get reimbursed for the debt. Debt collection is useless if it then takes you months to get it back from the collectors.

7. They have relevant tenure

Banking on experience is worthwhile when using a debt collection agency. If they have been around for a long time then this means that they are doing things right and will have a greater rate of success in recovering your debt.

8. They have a respectable review

People having debt collected from them will always be unhappy but there is still a need to look at the feedback and reviews left by those who have had debt collected from them. Look out for any red flags referring to use of force or violence as these can indicate potential problems that you do not want to be involved with.

Complete this checklist before using a collection agency and you’ll be able to enjoy a better service and a higher rate of recovery.

The beginner’s guide to debt recovery

As any company owner, sole trader or legal professional knows, it’s very easy for customers and clients to get into debt, but it can be pretty difficult to then recover that money. In this blog post we introduce a few ways you can carry out the debt recovery process, and avoid any serious issues down the line.

Assess the situation

There are a few early warning signs that will indicate a customer is having financial problems. If they consistently pay you late, or fail to meet the amount specified, it’s likely that at some point they will end up amassing debt on their account. As a business, you are likely to know more about this particular client or customer than a debt recovery service, so the first thing you’ll need to do is work out exactly how you are going to approach the situation. For example, do you need a debt recovery service that will act under your company name, or with this particular client might it be better to use a collection service that appears as completely independent of you and your company?

Do your research

Before you put a debt recovery plan into action with the first collection service you see, it’s a good idea to do some research. Check their history online by reading through online appraisals, or carrying out an internet search to check they haven’t got themselves into any legal hot water previously. The last thing you want is to find yourself entangled with a collection service that doesn’t follow UK law!

Choose a company that are experts in their field

The easiest way to begin the debt recovery process is to seek out an external collections agency offering reliable services that meet your business’s particular debt collection requirements. First Capitol Collections have been specialists in debt recovery services and outsourced credit control for quite some time now. We offer assistance with everything from debt recovery and tracing, through to door step collections and process serving.

If you’d like more information about any of the services we provide, get in touch with a member of our team today.

Your top 3 questions about debt recovery answered

Deby recovery is an area many businesses rely on but don’t always fully understand. Today, we’re going to provide some answers to the top three questions that we get asked by clients:

 

How can I go about recovering debts without causing upset to valuable customers?

Good customers generally appreciate the fact that creditors take a firm stance when it comes to credit control. If you are experiencing problems collecting payment from a customer you should get in touch with them to discuss the situation and make sure there are no unresolved issues or problems relating to their account. If everything is in order, explain the steps you intend to take in seeking recovery of the debt they owe, including information about potential legal proceedings. You should keep in mind at times that although this customer may have purchased from you in the past, the fact they have allowed their account to fall into arrears makes them far less of a valued customer to your business.

 

Should I pursue overdue debts?

In most cases it is worth considering whether the expense incurred pursuing outstanding debt will result in successful recovery. Debts of less than £100 could well be written off; however, this might set a precedent for your business and encourage greater amounts of bad debt from customers. It’s worth assessing each case on an individual basis, before making any decision to write off debts, irrespective of the amount of money that’s owed to you.

 

Is it possible to charge interest on overdue bills?

If your initial contract with this customer does not specify interest terms, you will be covered under the Late Payment of Commercial Debts (Interest) Act 1988 which allows you to charge interest at the Bank of England base rate plus an additional 8% for any debts that are overdue by more than 30 days. You could also be entitled to claim back the costs of collecting any overdue debts, although this is generally specified within the contract. It is not general practice for businesses to charge interest on overdue debts, however, unless the case has moved forward to a court of law.

 

First Capitol Collections provide a complete debt recovery service to clients, including doorstep collections, process serving and credit control. Contact us for more information.

Benefits of Outsourcing Debt Collection Services

With so many things to consider when running a successful company, the last thing business leaders want to be spending their time on is chasing after owed debts. It can be incredibly time-consuming and prevents business leaders from focussing on what they’re best at – consolidating and expanding their company.

This conundrum has led many companies to begin outsourcing their debt collection services – but is this the right move? Here are just a few reasons why utilising a specialised debt collection agency can be of great benefit to your company.

1. Maintain healthy working relationships

Chasing after owed debts can be a difficult process. It can often be embarrassing for both parties, and more often than not leads to damaged working relationships. Outsourcing your debt collection ensures that you maintain healthy relationships with your clients, whilst still receiving the money you are owed.

2. More time and money

Rather than wasting your time chasing after debts, outsourcing allows you to focus on what’s important – growing your business. Letting the experts handle your debt collection frees up valuable time whilst also making sure that you do not let any owed debts slip out of your fingers. Outsourcing to a professional debt collection service sends out the message that you collecting your bills is a number one priority!

3. Increased flexibility and resources

Unfortunately, some debtors will genuinely be unable to pay what they owe. Outsourcing debt collection services to a professional team allows your company to benefit from years of expertise in dealing with cases such as these, and implement long-term schedules to ensure you are paid what you are owed, in full. Moreover, a dedicated debt collection service allows your company to access substantially more resources than a small, in-house team would be able to provide. For example, professional services have procedures in place to track “lost” debtors, ensuring that your company never loses a penny more than it needs to.

As you can see, outsourcing your debt collection services to a specialised, dedicated company can offer a host of benefits. To see what a holistic debt collection agency can do for your business, contact us today!

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