If some of your business' customers owe your enterprise money, and you need the help of a debt collection agency to get these people to repay this money, read on to learn about what approach you should take.
Make sure you check the commission rate of the debt collection agency you want to hire
Clients of debt collection businesses normally have to pay a commission fee, which covers some of the expenses that the debt collection agency incurs whilst collecting the money that is owed to these clients. This fee often comes in the form of a percentage of the funds that the debt collection agency recoups for their clients. When searching for agencies online, you should look for those that specifically offer debt collection low commission services.
The reason for this is as follows; when you use this type of financial service, your goal is to retrieve most of the money that your customers have not yet paid back. However, if the agency you hire to collect that money asks for a very high commission rate (for example, 75%), then you will only end up receiving a small fraction of the money you originally lent to your customers. This may result in your business continuing to experience financial issues, despite you having gone to great lengths to get this money back.
Conversely, if you ensure that you hire an agency who asks for a low commission rate, you can expect to be repaid the vast majority of the money your customers owe you, and the effort you put into finding and hiring a suitable debt collector will be worthwhile.
Determine what approach you want to take to debt collection
There are lots of debt collection businesses, each of which will take a slightly different approach to their work. It's important to pick an agency whose style is a good fit for your business.
For example, if many of the customers who owe your enterprise money are vulnerable or are on low incomes, and you do not need the money you lent them to be repaid very quickly, then you may want to use a debt collection agency who takes a light-handed approach to its work. In this situation, it might be a good idea to pick an agency who will only attempt to contact your customers once or twice a week, and who will be considerate of these individuals' challenging financial circumstances when setting up their repayment plans (i.e. they will not ask these people pay back their entire debt all at once).
Conversely, if your customers' failure to repay their debts is ruining your business and these people fall into a demographic that is generally quite wealthy (meaning most of them should have no difficulty repaying their debt), then you might need to use an agency who takes a very firm, no-nonsense approach to collecting debts, which might involve polite-but-tenacious communication with your customers, that will encourage them to repay what they owe in a timely manner.