Tips for choosing the right collections agency for your business
Unpaid invoices and debts are one of the biggest challenges facing small and medium businesses across the country. According to a Sage report dubbed ‘The Domino Effect: The Impact of Late Payments’, most businesses are forced to write off 10% of their invoices because they either receive late payments or are not paid entirely. This could be a big problem for small businesses that don’t have the resources to dedicate towards chasing unpaid invoices. Hence, it may be worthwhile to hire professional debt recovery services to deal with clients that fail to pay their bills. Here are some quick tips to help you choose the best collection agency.
Whether your business is a consumer or commercial business, consider a collections agency that specialises in your type of work. In other words, your best bet is an agency with years of experience in collecting debts in your industry. Get credible recommendations from your business contacts such as suppliers, lawyers, and accountants.
Verify that the collections agency is licensed to collect debts for individuals and businesses across the country. It is safer to hire a debt collections agency that practises skip tracing. Remember, if a collections agency is not licensed to collect debts countrywide, it might not be able to use databases to track debtors through skip tracing.
Hire a collections agency that is properly insured. An established debt recovery service provider should have Errors and Omissions insurance. This insurance policy will protect you and the agency financially in the event that the debtor decides to sue.
Remember to compare fees and contingency costs. Here’s the deal: all collection agencies charge for their debt recovery services differently, so you should choose one that suits your needs and budget. While some agencies might charge a flat rate, others prefer a contingency payment structure.
Regardless of the size of your business, it’s inevitable to find yourself in a position where clients fail to pay their bills or debts. When you have explored all efforts to collect the unpaid invoices or debts in vain, it’s advisable to seek the services of an established debt collection agency. If you need the best credit control, debt recovery, process serving, doorstep collections, and tracing services, contact First Capitol today.