When unpaid debts pile up and your business is on edge, the only place you’re going is out of business. Did you know that 82% of businesses in the US fail because of cash flow issues? This makes cash flow problems the number one reason for business failure by a huge margin. If you’re having trouble collecting payments from your customers, it’s only a matter of time before your business crumbles. Thankfully, you can always hire a commercial collection agency to help save your business. Collection agencies can be immensely useful in getting delinquent accounts paid off.
If you’re a Cleveland small business owner looking for a commercial collection agency, you’ll undoubtedly have plenty to choose from. This is good news, but sometimes picking from the myriad of options can be challenging.
To help you out, we’ve compiled a couple of tips to help you find the best commercial collection agency for your needs.
1. Check Whether the Agency Has a Valid License
All debt collecting agencies in the country require a valid license to operate in their jurisdictions. This makes a valid operating license the first thing you need to look for when hiring a debt collection agency.
Apart from the license, the agency should also be bonded and abide by all the regulations stipulated by the Fair Debt Collection Practices Act. Any agency without a license is illegitimate and will probably be a waste of time.
2. Inquire About Their Debt Collection Tactics
It’s important to understand the debt collection tactics the agency in question employs. Some commercial collection agencies use unscrupulous methods that could hurt your business’s reputation. The best collection agencies only use modern, ethical collection methods etched in professionalism.
A good collection agency will also be open and transparent about its collection methods. They should be able to answer any questions you have about how they recover money from debtors. Collection agencies that aren’t open about their debt collection tactics probably have something to hide.
They’re either using illegal or unethical means that are bad for your business. In some cases, customers might take legal action, which means more trouble for your business.
3. Look for an Agency With Experience in Your Line of Business
Ensure you find an agency experienced in collecting debts from businesses like yours. The collection process can be quite different for different types of businesses.
For example, a collection agency specializing in collecting medical debts might not be the best choice if you run a construction company. That’s because the payment structures for construction companies are way different from those of clinics.
Ask whether the collection agency has worked with businesses like yours before. Also, find out about the type of debtors it deals with and its track record with the said debtors. This leads to the next point.
4. Look at the Agency’s Success Rate
A collection agency’s success rate should be one of your main concerns when hiring one. Ask the agency about its average collection rate and compare it with other agencies in its niche.
While a 70% success rate is considered average, the best collection agencies boast collection rates of up to 90%. The collection agency you pick should have a high success rate or a decent one at the very least. Of course, the agency should provide enough evidence to substantiate its success rate figures.
5. Look for an Agency That Offers Skip Tracing
Skip tracing is the collection agency’s ability to find debtors who’ve gone MIA. This is an important service, especially if dealing with large debts from crafty delinquents.
The best collection agencies have in-house skip tracers who use cutting-edge technology to track down debtors. They also have access to databases that make it easier to find them. Although there’s no guarantee of payment, you can rest easy knowing that the debtor is within reach.
Not offering skip-tracing services shouldn’t be a deal-breaker for most small businesses. However, it’s still nice to have as an option.
6. Read Reviews and Testimonials From Previous Clients
Online reviews and testimonials will help paint a clear picture of what you can expect from the debt collection agencies. Previous clients retell their experiences with the said agency in these reviews.
You can learn a lot about the collection agency by reading a few reviews. They should help you make a better decision on whether you should hire the company.
However, don’t be quick to dismiss an agency because of a single negative review. Read both positive and negative reviews to get a well-rounded view of the company. Only then can you make your final decision.
7. Find an Agency You Can Afford
Hiring a debt collection agency should aid your company’s finances, not hurt them. Unfortunately, some agencies charge exorbitant prices that may be unfeasible for your business. You need to ask the agency about their service rates before hiring them.
However, this isn’t to say that you should hire the cheapest agency you can find. Doing so will only work to your detriment. Most collection agencies that charge meager rates have mediocre services to match their rates.
You’ll need to do your digging and find a commercial collection agency with reasonable charges. Ask for estimates from different companies and pick one that matches your budget. Again, this doesn’t mean picking the cheapest one you can find.
8. Check the Agency’s Communicativeness
A communicative collection agency keeps you in the loop on the collection process. This is important so you can make necessary financial changes and other arrangements if need be.
The collection agency should send you regular updates on your account. These updates might include the number of calls made, emails sent, and payments received (if any). You should be able to reach the collection agency easily as well.
Hire the Best Commercial Collection Agency for Small Businesses in Cleveland
The information above should make finding a commercial collection agency for your Cleveland business a breeze. However, remember to settle for nothing but the best collection agency you can find.
Lucky for you, the best commercial debt collection agency in Cleveland is only a phone call away. Contact us so we can help you recover all your debts.
First Federal Credit Control
24700 Chagrin Blvd #205
Beachwood, OH 44122