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When is the Right Time to Hire a Collection Agency

Posted by Emily Herrington on Feb 15, 2022 11:30:00 AM

Even though not everyone may have a favorable view of debt collection agencies, the fact is, they perform a vital service that keeps costs down and maintains client relationships. Before you take inventory and decide whether hiring an agency is the right move for your business, consider all the ways in which using collections is the smarter and more efficient move for you and your business.

Some of the biggest obstacles companies face when trying to recover debt is that they lack the money, time, and specialized experience to deal with delinquent accounts. Collection agencies employ specially trained individuals whose entire focus is debt recovery. Furthermore, there is no one-size-fits-all recovery agency. There are agencies that specialize solely in recovering medical debt, and others that also specialize in dealing with smaller or larger delinquent accounts, etc. in a myriad of industries. If you require their services, you can search for a reputable agency acquainted with your industry that suits your needs. In addition to better training and more procedural knowledge, collection agencies also have better technology to locate, communicate, and create payment plans with debtors. Simply put, why hassle with something you’re unfamiliar with when a professional can put money back in your pocket quicker and more effectively?

Another consideration for outsourcing debts to collections is to preserve relationships with clients. By putting the burden on a third-party, suddenly your business is not spending unnecessary time calling clients to collect. This means you can retain more of your clients and continue to foster those relationships by focusing on the service you provide.

Is now the right time to hire a collection agency? If any of the following six factors apply, you should heavily consider getting the outside help your business needs.

  1. Personnel deficit: You do not have any employees devoted to rectifying extreme delinquent balances.
  2. Time deficit: When you don’t have someone specialized in delinquent receivables; you do not have the time to track down information or familiarize yourself with proper collection procedures.
  3. High quantity: When the quantity of receivables surpasses your staff’s capacity to handle them.
  4. Cost: The money spent by your business to recoup debt is higher than the cost to hire a collections agency.
  5. Small balances: If there are many accounts owing small balances, it might not be worth your staff’s time to handle it themselves.
  6. Knowledge deficit: Debt collection requires specialized knowledge and technology particularly when debtors become hard to locate.

If one or more of these apply, now is the time to consider unburdening your business and focusing on what you do best. Leave the debt collection to the highly trained and specialized professionals. Hire a collection agency to recover what you’re owed. It will save you time, money, and even preserve your client relationships.

Account Resolution Team collects for all industries with specialized systems in place for everyone. Be sure to follow us on Facebook, LinkedIn, and Twitter and see our other blogs at: www.accountresolutionteam.com

Topics: Collection Strategy, Compliance, Technology, old debt, debt collections, collection agency, how to get out of debt, unpaid debt, accounts receivable, outsourcing, commission rate, revenue, recovery rate, debt settlement, Regulation F, debt collection regulations, medical collections, medical debt