British Columbia Spring 2022
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
How a Collection Agency Fits With the
Roles In Your Business
One of the most powerful mechanisms triggered when you engage a debt collection agency is third-party psychology. The reality is that non-paying
debtors (whether individuals or businesses) who ignore multiple gentle reminders have consciously chosen to dishonor their original commitment
by not paying your company. They’ve weighed the options, and for one reason or another decided to re-allocate the promised money to
something else. In such a situation, it becomes very hard—sometimes impossible—to collect what is owed to you on your own.
But when a professional third party steps in on your behalf, the dynamics change entirely. It’s no longer you or your employee pleading to be paid
(often semi-apolegetically). Now it’s a collection professional asserting your end of the bargain with authority—and consequences. An accredited
collection agency can report unpaid accounts to major credit bureaus, trigger lasting impact on the debtor’s ability to secure further credit.
This combination changes the game, making collection through a collection agency more effective than in-house efforts and usually faster than
litigation.
To achieve this, it is helpful to understand how the collection agency can benefit everyone in your business—and to ensure your team members
enterprise-wide can also appreciate how far-reaching the relationship can be. The better the collection agency’s role and that connectivity is
understood, the more effective use your business can make of it.
For the CEO, CFO and stakeholders, the best collection agencies add value by supporting positive cash flow in all economic cycles. A business
that uses a collection agency most effectively is methodical and sends accounts out like clockwork, based on a written policy. I recommend 60
days past due as the maximum during uncertain times—increasing the likelihood of collecting before secured creditors and the taxman claim all
the available money from a debtor business in trouble. The result is invariable fewer bad debt write-offs, and better profits.
Sales managers and their teams appreciate how a proactive and
retension-focused collection agency can avoid the painful moments
when hard-earned accounts must be frozen, and the business can be
lost due to mishandled internal collection efforts. (And for sales reps
charged with the awkward duty of collecting debt on their accounts,
there is no greater relief than having one’s employer bring on a good
collection partner.)
Marketing departments also benefit from the use of a good collection
partner. A central part of marketing is reputation management, and
the best collection agencies understand the vital role they play in representing
the brand positively, particularly in consumer collections
where customers can often turn against the brand when collections
are managed improperly. The most professional collectors recognize
the importance of win-backs when the customer’s situation turns
around, because every client’s customer pool is finite. And while even
the most tactful in-house collector can put the brand under fire, a
collection agency relationship places precious distance between its
client and the role of collection—buffering the backlash with customers
who will invariable prove more volatile.
Accounting teams often directly benefit most of all from having a reliable
collection agency to partner with. Most accountants, bookkeepers
and even Accounts Receivable managers are delighted to have the
task of placing collection calls delegated to a team of debt recovery
professionals, removing what can be the most dreaded and stressful
part of their workday. Needless to say, job satisfaction and turnover
for accounting roles tend to see a huge positive impact from working
with an effective collection agency.
Because it’s such an impactful relationship, be sure to do your homework
when making the decision to partner with a collection agency,
Look at online reviews (and how the agency responds to debtor complaints
as well as customer posts), BBB ratings, and even pay a visit
to the collection agency’s office if they allow it—my own have always
had an open-door policy. Be sure the people within your organization
understand how the new engagement benefits their job, the company
and the brand. Done right, it can be a powerful step forward for
profitability and for everyone’s job satisfaction.
Author: Brian Summerfelt
President and CEO of MetCredit
Canada's Top Performing consumer
and commercial collection agency.
Now Booking
for Edmonton
and Calgary
Fall Home
Shows
Call
780.406.6441
or Email
adcopy@realhomeadvice.ca
HOMEADVICE
31