A good receivables management firm does a lot more than just recover accounts: they’re an extension of your customer service, a representative of your brand, and a valuable strategic partner in reducing bad debt.
Finding a partner who can help you recover accounts and keep your customers happy isn’t easy – but it is possible. The key to finding the perfect solution is a robust vetting progress: your time spent checking potential business partners now will pay off in the future, when payments are up, and complaints are down.
We recommend you use the following nine questions to check the suitability of each candidate:
1. Are they a member of national and state organizations?
Industry associations are a key way businesses find out about new best practices and regulations, and you should expect your receivables management firm to be a member of the ACA International, (The Association of Credit and Collection Professionals) in addition to any state organizations. Regular participation in these associations or C-level employees holding office in one is a bonus.
2. How do they ensure your customers receive good customer service?
Recovering money is important, but not at the expense of your reputation and the wellbeing of your customers; outdated recovery practices can harm both. Look for a firm which has the right quality assurance in place and trains its representatives in social skills, customer service, and complaint resolution, and that makes it easy for customers to communicate with them and review their accounts.
3. What type of training do their representatives receive?
A collector is only as good as the training they have received. If you want to treat your customers fairly, you should expect their collectors to have gone beyond basic or introductory training. Look for negotiation training, complaint resolution, and other applicable skills. Better trained collectors will recover more accounts with less stress and turmoil for your customers.
4. What "net back" will your organization receive?
The most important number you can know is the net back, the proportion of the outstanding accounts that you can expect to receive. This number is far more important than rate; a firm with a higher rate may provide a higher net back by utilizing superior strategies and higher recoveries by not cutting corners. Sometimes the cheapest rate is not the best rate!
5. How will the receivables management firm help you reduce future bad debt?
When an account reaches the point it requires a collector, it’s already too late; statistically, you won’t see all of that money back. A great receivables management firm should do far more than just help you collect money: they should be helping you prevent these accounts from getting to that point by explaining trends as to why your customers aren’t paying. A firm that shares their experience and data with you will have a far greater impact on your accounts.
6. Are they insured?
Always ask for proof of insurance. This protects you in the event that an over-aggressive collector or a mistake by the agency results in a lawsuit – you don’t want to be held liable for mistakes or errors that your receivable management firm makes.
7. Do they use "skip tracing" to help recover from your customers who have moved?
Unfortunately, some customers move without registering a change of address which makes it that much harder to collect from them. Using skip tracing helps collectors track down these individuals so that they can be approached about their outstanding balance – even if they’ve moved out of state.
8. What is their reputation?
Use your contacts within your industry to find someone who has worked with the firm before. What experience did they have? And, equally important, what experience did their customers have? Are they still using the firm? If not, why not?
If you don’t have any contacts who have used the firm before, ask for referrals; they should be able to provide a list of references without hesitation.
9. How do they use technology to enhance their service?
Technology should support many receivables management processes, but it shouldn’t completely remove the human element. For example, a client-friendly web portal that allows customers to review their accounts, communicate with the agency, and make payments online will increase trust and make it easier for customers to stay up-to-date with their payments. But it should not replace the ability for a consumer to easily reach a live human to assist them in resolving their account or any issues they may have.
Tavelli Co., Inc. has over 37 years of unparalleled experience in the debt collection and receivables management industry. Our mission is to achieve the right balance between getting clients paid and being empathetic to debtor circumstances, through implementing innovative practices, hiring experienced people, and improving business decisions through analytics. We provide peace of mind to all involved by collecting money with no complaints. Tavelli Co., Inc. takes the time to carefully listen to your customers and share their feedback with you through meaningful data and transparent communication, so you have access to the information you need to make quality decisions and improve your processes in the future. Contact us today and let the debt collection experts at Tavelli Co., Inc. help you set your business up for success.
IMPORTANT: Information provided by Tavelli Co., Inc., any employees of Tavelli Co., Inc., or its subsidiaries is not intended as legal advice and may not be used as legal advice. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel.