OK - so, you are running a business that is having a tough time with its debtors. Cash flow is tight and customers simply aren’t playing ball and settling their invoices promptly. Every effort to cajole them into paying has failed. The time has arrived to call in a Debt Collection Agency.
But who do you turn to?
Making the right choice could be pivotal for your business. Firstly, you want an agency that can achieve a successful outcome. But you also need to be confident that by engaging their services, there will be no, or minimal collateral fall-out for your business.
Here’s a brief checklist for you, to help you come to the right decision – one that will achieve maximum results, without leaving you with any long-term repercussions.
Key considerations when selecting a Debt Collection Agency
1. Is the agency properly Authorised and Accredited?
Avoid using cowboy firms. Sadly, there are plenty of unauthorised debt collectors out there who should be avoided like the plague. Make sure that you choose an agency that has a credible track record; one that is authorised and licensed by the Financial Conduct Authority (FCA). As an FCA approved organisation, the agency’s procedures and practices will have been fully ratified to handle regulated and unregulated debt in the UK. To have achieved this status, the agency will have come under close scrutiny to ensure that it operates ethically, with integrity and is fully compliant.
To complete the FCA accreditation, the Authority must also approve senior managers under the Senior Management & Certification Regime (SM&CR). This is to demonstrate that these individuals have the appropriate level of expertise Meet Manx Collections Managing Director Stuart Reid to run the company.
Crucially, this accreditation enables the collection agency to take on the key responsibilities of Anti-Money Laundering, Compliance and Directorship. This is a guarantee of the company’s conduct and competence which in turn, should offer comfort and protection to you, the client. Reputation counts for a lot.
2. Understand the Collection Agency’s Modus Operandi
How exactly will the debt collection agency go about recovering money on your behalf? It’s a fundamental question. Again, a credible and regulated company will have a tried and tested process as to how it operates. Typically, this will involve phone calls, letters, emails and possibly visits in person by an experienced member of the agency staff. If this fails to produce the required results, then it may be necessary to take legal action on your behalf. The agency will be able to handle all this for you in a timely, professional manner. A proportionate response is what you should be looking for – and the agency will clearly appreciate this.
3. What are the Costs for their Debt Collection?
Make sure the debt collection agency has a transparent charging policy. It’s important to understand exactly what services you’ll be getting for your money. Check to see that the figures discussed are all-inclusive and that there aren’t going to be any unforeseen expenses for which you will be liable. The agency should be able to explain everything to you, their rates of commission and how this will relate to the recovered debt.
4. Does the agency know your industry?
It may not always be the case, but if the agency has prior experience of working within your industry, then this could prove useful. An understanding of how your sector operates, its protocols, what’s accepted as standard practice etc., could help speed up the debt recovery process.
5. Keeping track of Progress on Cases
Especially in situations where you would need to hand over a number of cases to the collections agency, it is essential that they have a good reporting system How Manx Collections Works With Your Business - Manx Collections in place. For a professional, regulated company, this should be a given. As a standard part of their service, you should be assigned a case manager, so that you have a clear point of contact. The agency should also provide you with an online portal to enable you to log in at any time and keep an eye on progress.
6. Avoid No Win, No Fee Debt Collection
Things are normally cheap for a reason and, as with any type of professional service, this certainly applies to debt collection. With this firmly in mind, it is always best to steer clear of companies flagging up their “no win, no fee” marketing spiel. The concept of payment-on-results debt collection is disingenuous, to say the least. There is no such thing as a free lunch and, more often than not, these outfits will adopt questionable and threatening tactics – and then expect a hefty fee for the privilege. Even if you succeeded in getting money back, it could come at a very high price in terms of the costs involved and your business reputation. You don’t want to lose clients because of heavy-handed debt collectors!
7. Do your Research
Go through a proper process of due diligence. Don’t necessarily go for the first agency you come across online or from the phone book. Check out their credentials, and see what experience they have. An experienced, professional and caring company should be able to explain everything to you at the outset, to give you that essential peace of mind.
Making the right decision could be a godsend for your business – and a huge boost as far as that all-important bottom line is concerned.
If you are worried about outstanding debts within your business, please feel free to contact us for an initial non-obligatory chat on 0161 464 4400 or email info@manxcollections.co.uk