When to Hire a Collection Agency

hire a collection agency

If your customers keep missing payment kosten incassobureau inschakelen particulier deadlines and you’ve exhausted all other strategies to collect overdue invoice payments, it may be time to hire a collection agency. These companies specialize in contacting nonpaying customers on behalf of creditors and lenders to recover outstanding debts, and they typically charge a percentage of the amount collected. However, if you’re in the market for one of these services, it’s important to understand how they work so you can make an informed decision.

The first step is to find an agency that is licensed. Since states have different rules about how agencies can operate, look for one that focuses on the size and industry of your business and that is well versed in the laws of your area. Also, make sure the agency has insurance. If a collector violates a law while trying to collect from a client, the agency’s insurance could protect your business.

Protecting Your Cash Flow: Top Reasons to Partner with a Collection Agency

Once you’ve found an agency to work with, agree to a fee structure that is consistent with your company’s goals. For example, many collection agencies offer a pay-on-collection model where you only pay them when they successfully collect an overdue payment from your customer. It’s important to understand what steps the collection agency will take should you decide to sue a nonpaying customer, and to choose an agency that is familiar with this process. Lastly, be sure to select an agency that will give you a point of contact with whom you can communicate throughout the debt collection process and get regular status reports.

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