Monday, February 14, 2011

How To Choose The Right Collection Agency For You

Large or small, eventually, each and every business that sells on credit may have a collection problem. Choosing the right collection firm is central to overcoming that challenge along with a critical long-term factor in the success of one's business.

Identifying a collection firm that understands your industry, processes and expectations will ensure that the company goes beyond merely identifying a solutions provider, and finds an authentic partner to assist together with your long-term goals.

What’s more, the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009, implemented in February, ushered in a brand new era of unprecedented emphasis on efficiency and results for collection agencies. See how to avoid from the CARD Act, the collection industry is specifically focused on finding ways to sustain revenues although adjusting to a significantly altered environment, since an improve in regulations means an increase within the cost of doing business.

Within their pursuit of a sustainable competitive benefit, businesses are nicely advised to include these 4 crucial concerns when looking for possible collection partners.

1) What's the experience level and trustworthiness of this collection agency within my particular business?

Experience, prominence and brand are among the characteristics that customers must look closely at when thinking about collection partners. How's this firm regarded amongst its peers, amongst its customers? An additional extremely essential question related to reputation is how nicely a collection agency treats its client’s customers. Clients are looking for collection firms which have a track record of treating their clients’ customers with dignity, patience and understanding. It is a distinguishing characteristic that is essential.

In judging experience, businesses will want to know not just whether a collection firm can deliver breakthrough numbers but how they achieve these outcomes. They'll wish to know a collection agency’s overall good results rate, which is not measured by liquidations and gross money alone but adherence to high quality in each and every facet of the operational delivery.

Companies have to evaluate experience and strengths in many different essential areas extending across the debt lifecycle from pre-chargeoff to late-stage, post-chargeoff collections. Agencies claiming breakthrough numbers during these locations must be ready to exhibit how they achieve this, because understanding what you do nicely and just how you need to do so leads to constant efficiency.

From a reputational perspective, it is also important to evaluate their education to which legal disputes are a factor at an agency. By the nature of the function, services firms, including collection agencies, will in the end find themselves involved in a dispute of some type at some time.

Nevertheless, an unrelenting and excessive history of litigation is really a distraction for management and could be an indicator of deeper systemic issues. This ought to be a warning flag inside your thought on a collection agency.

Another important differentiator is regardless of whether a firm fully understands the distinctions among card providers as it relates to consumer kinds. Since one issuer won't necessarily attract customers with the exact same level of sophistication as another, choosing a collection partner that is responsive to this really is essential.

Assessing experience, prominence within the business and overall brand recognition are crucial initial barometers in determining which collection agencies belong in your shortlist.

two) How well can one gauge the operational excellence at this agency?

Success for collection providers ultimately means operational efficiency and excellence. Review what systems, practices, protocols and standards are in place, and how these elements are measured at possible collection firms. That indicates searching for superiority during these crucial locations:

• Experienced staff. Appear for employees with deep business knowledge and expertise, a hallmark of operational strength. Ultimately, it is the front-line staff who bears the load of executing day-in, day-out.

• High retention rates. Attracting talent is component 1. Part two is retaining that talent, which demands distinctive cultural attributes at a collection agency. Are its employees satisfied? Will they stick about or perhaps is there high turnover? Among the features that distinguish organizations will be the ability to provide top training that arms agents to deal with myriad situations and concerns amongst consumers. This can be aided considerably in a culture that reinforces teamwork and mutually shared goals.

• Rehire rates. An additional metric not frequently discussed is the quotient of talented people who have left the firm and then return after an interval. This reflects the culture of the organization and can indicate the existence of a positive work atmosphere, an essential addition to some culture driven purely by monetary interests.

• Sound business intelligence and analytics. Collection providers must be unrelenting in their capability to look inward and continually enhance and enhance their business practices based on a closed feedback loop. Equally important will be the ability to analyze and assess customer-centric processes for ways to wring cost and/or time savings from the equation.

• Innovation and investment. Operational excellence requires technology innovation at the core of the outsourcing platform. How a collection agency employs its technology systems is definitely an important ingredient in upholding a sustainable competitive benefit. Using on-line communications to resolve problems instead of real-time telephone calls, for instance, imposes much less fatigue on people. Purchasing these kinds of technologies is the ongoing cost of success. Your day a collection agency stops investing will be the day it begins to shed talent and competitiveness, which seriously impacts growth.

• Rapid expandability. An additional critical success factor will be the capability to include capable capability to the organization quick. An inability to scale up quickly having a deep bench of talent in order to meet a client’s needs is really a particular deal-breaker in the collection business.

three) What geographic options are obtainable for back-office service delivery and just how does that align with my price structure?

With respect to the specifications from the engagement, the ability to offer cost-effective, geographically diverse solutions allows a collection partner to maximize profitability lowering costs, increasing liquidation rates, otherwise both.

Are you currently considering a single-location provider or 1 with multiple geographies that may be leveraged to drive profitability? Possessing a suitable “right-shoring” solution is another driver of breakthrough results for customers.

For instance, in some instances, it may be essential to possess a provider operating in or close to your own time zone, by which situation a near-shore solution is called for. In other cases, access to offshore solutions might be probably the most cost-effective route.

Whether it's much more effective to function with a provider that may offer a variety of options (U.S., Asia, Latin America, and/or global) depends on a number of factors. In a event, the ability to use on-shore, offshore or near-shore capabilities affords depth and options that can possess a significant impact at the base line.

4) What type of certifications has this collection agency earned?

Business certification is the foundation where standards for procedure, operational and service delivery reliability, integrity and excellence are set over the business. Applications are made to guide the development, implementation and adherence to industry-specific requirements that foster best practices and policies.

ACA International, the association representing the nation’s collection agencies, offers a certification plan called the Expert Practices Management System (PPMS) - a management system for collection agencies that comprises 17 basic components and serves as a standard for most from the industry.
Certification to PPMS requirements demands submission to some rigorous audit and evaluation of procedures and practices by independent third-party accounting and audit organizations hired by ACA.

Applications such as PCI DSS provide certification standards that address security management and related policies, also as procedures, network architecture, software program design along with other critical measures established to help organizations safeguard consumer account data. This really is a mission-critical endorsement at any given time when client sensitivity to the potential for security breaches and fraud runs higher than ever before.

Some certifications, such as SAS 70 Type II audit, verify that collection agencies possess the appropriate internal controls and procedures in location to provide high-quality services to clients. Other standard-setting programs, such as Six Sigma, span industries, setting forth standards of excellence at an enterprise to systematically improve business processes to much better meet or exceed customer specifications.

Although certifications may certainly not be business requirements in each and every case, agencies that proactively meet these standards for best practices are demonstrating a distinguishing degree of commitment and warrant unique consideration over these that do not.

Certifications and a record of adhering to those requirements are essential to appear for in assessing potential collections partners since probably the most acknowledged requirements exist in order to verify procedure excellence, the greatest quality of client service, and create a measurable, tangible business gain for customers.

1 comment:

  1. Very , well written article.
    Robert Williams
    Williams, Cohen & Gray Inc