Collection Agency Selection

Frankly, given the legal and regulatory requirements involved in attempting to collect a debt, it makes as much sense to do it yourself as it does to try to remove your own appendix. A collection agency is, on the whole, much cheaper than a doctors - and lawyers. Do yourself a favor and let a professional collection agency handle this complex matter for you.

It is an unfortunate fact that the collections industry is not regulated much by the government. Absolutely anybody can set themselves up with an "office" and call themselves a collection agency. You don't have to be certified or accredited by anybody.

You don't need any kind of special degrees or anything like that to start a collection agency. So, while there are plenty of reputable, ethical collection agencies out there, are also plenty of con artists. It's a case of buyer very much beware.

Beyond making sure the collection agency is credible, you'll need to make sure they are right for your business. Each collection agency may have different specialties and, even if they don't, they might not have the specialized knowledge required to collect in your industry. A collection agency working in medical collections must be familiar with medical terminology and insurance requirements. Make sure the collection agency has the skills and knowledge needed to successfully collect on your particular type of account.

You will also have to consider the fact that the collection agency will have to be paid for their services. A collection agency usually charges you a percentage of the money they collect on your behalf; currently the industry standards range from 25% to50%, depending on the dollar amount of the account, the age of the account, how much overall business the collection agency gets (or expects to get) from you in the long run, and other factors. Some collection agencies charge a low flat fee per collection which may be a more affordable solution for some businesses.

What you really want to know about this collection agency, however, is what they quote as their average recovery rate. The collection agency cannot guarantee that they are going to collect the money you are owed, because their ability to do so will dependent on many unforeseen factors. But the collection agency can give you a percentage of approximately how much their collection agency collects of the accounts that are placed with them, in general and in your particular industry. That is going to be much more important than their commission rate.

Finally, you'll want to check your potential collection agency out with both the Better Business Bureau and your state's Attorney General's Office. Specifically, it is important to discover if there have been any complaints registered against them by disgruntled former clients, or if they have had to defend themselves against alleged violations of the Fair Debt Collection Act. Remember that this collection agency will be representing you and your business. You don't want the sort of collectors who threaten to break people's knee caps, or call their neighbors to harass them. Make sure you're dealing with real professionals.

With the right kind of collection agency, you will be able to develop a real working relationship with the account executive who is servicing your account. These guys can be enormously helpful, particularly when it comes to dealing with bad-tempered debtors. There are going to be distinct legal limits to the kinds of things you can say and do, no matter now nasty people who owe your money become, and consulting your collection agency rep is a lot cheaper than talking to your lawyer. As long as all parties involved recognize the fact that yours is a partnership, in which both of you treat each other professionally, you will be well on your way to a good, long-term working relationship.

Collection Agency Outsourcing offers you free information on collection agencies and debt collections issues.

In The News:

Small business is backbone of the community  Bryan-College Station Eagle
Local small business awarded $10k grant  Eyewitness News (WEHT/WTVW)

Share Ad Expenses to Boost Profits

The challenges of the small business owner are well documented.... Read More

Small Business Newsletter Dilemma: Which Day Do I Send?

If you're just ramping up your small business email newsletter,... Read More

Build Your Small Business by Building Relationships

-- The One Pager Shortcut Series --People do business with... Read More

Is Brick and Mortar A Passing Fad?

Q: Is the online world the best place to sell... Read More

Launching your Business with a Chamber of Commerce

Why are Chambers a good launching pad?Chambers provide you with... Read More

Computer Tips that Help Small Businesses Operate Profitably

When working properly, computers enable small businesses to make big... Read More

Small Business Pricing Strategies

TACTIC #1 -- Never simply slash your prices, unless you're... Read More

Five Quick Ways to Speed Up Cash Flow

At one point or another, almost every business runs short... Read More

How to Make Your Business Image Stand Out Above The Crowd

Traditional advertising methods are still being used for almost 90%... Read More

Want to Grow Your Business? Make an Irresistible Offer

My clients and many of my readers are small and... Read More

Temporary Staffing Agency: How to Start

The temporary staffing industry continues to expand, with yearly double-digit... Read More

Reclaim Equipment Detailing Industry and NPDES, EPA, Storm Water Rules

It behooves every professional mobile auto detailer to stay up... Read More

Essex Accountants: Top Things to Look For

One of the most common horrific mistakes a business can... Read More

Buy a Flower Shop: Serious Considerations

You've always liked flowers and you think the idea of... Read More

Franchisee; Vacation Managing

Do you own a franchised business? Over 400,000 franchised businesses... Read More

Home Based Franchise; What About Future Expansion?

As a franchisor I am always asked by new and... Read More

How Disabled Veterans Can Win Government Contracts

The Service-Disabled Veteran-Owned Small Businesses (SDVOSB) is a program that... Read More

How to Successfully Avoid Becoming One of The 80% of Small Businesses That Will FAIL

It's a commonly quoted statistic: 80% of all small businesses... Read More

Small Does Not Mean Invisible!

Running a business on the net these days can be... Read More

Boston Market; Mobile Auto Detailing

Boston itself covers 50 square miles of concrete and traffic,... Read More

Taking Stock

Back when I owned an inventory-based business, one of my... Read More

Where To Get Money For a Franchise Idea

How often have you thumbed through a business opportunity magazine,... Read More

Collection Agency Selection

Frankly, given the legal and regulatory requirements involved in attempting... Read More

Does Your Small Business Marketing Suffer From The Bulldog Effect?

If you're an entrepreneur responsible for your own small business... Read More

Find Your Niche & Follow It - Part 1

In this series of articles I'm going to show you... Read More