Some finance directors are adamant that the optimal course of action involves overseeing every component of business functionality internally. After all, if you want anything done perfectly, you should do it yourself. Others must keep their feelings to themselves, especially those who are concerned about external data security breaches. While a third group of directors believes that allocating already existing human resources (or spending money on new ones) for program operations, they believe that purchasing expensive software to handle tasks like bookkeeping, office management, and online marketing is the best course of action.
The do-it-yourself approach may work in some cases, but corporate tasks like third-party debt collection agency require the expertise of skilled professionals in addition to a robust technology and security infrastructure. The question of whether companies can match the track record of reliable debt collection agencies on their own remains.
Finding a solution can be difficult, but it becomes less difficult when one is aware of the principal advantages offered by outsourcing to a qualified debt collection agency:
● Compliance and certification
● Time management
● Cost-effectiveness
● Favorable results
Third party debt collections should ideally start early in the consumer revenue cycle, whether internal or external efforts are used.
Debt collection agencies accomplish this by speaking with or writing to clients who are at risk of becoming delinquent and establishing their status as debt holders. The goals include raising recovery rates while treating clients with respect and maintaining their loyalty to the business. Their efforts’ success is based on experience, plan, and tried-and-true methods.
Compliance and Certification
Top-tier third-party debt collection agencies are run by executive officers with in-depth knowledge of financial services and a track record of corporate moral behavior. Their operations are supported by legal staff, qualified debt collectors, and professional collection officers to guarantee perfect compliance and brand protection.
The heavily regulated financial services industry is a minefield, especially for companies trying to navigate the dangerous terrain alone, according to the Consumer Financial Protection Bureau’s (CFPB) 2015 annual report.
However, the seasoned agency constantly complies with rules like the Fair Debt Collection Practises Act, Fair Credit Reporting Act, and Telephone Consumer Protection Act with the help of ACA-trained Credit and Collection Compliance Officers and certified collectors.
Time Management
The majority of businesses prefer to focus on the primary revenue stream of their chosen vertical rather than the challenging process of debt collection, where sending demand letters and making phone calls to delinquent clients is the norm. Time spent on debt collection is time not spent on the primary production of products or services.
For third-party debt collections to be successful, it’s important to keep an eye on call reports, performance metrics and trends (daily, weekly, monthly, quarterly, and yearly), and long-term objectives. Directors spend a lot of time analyzing this data in addition to frequently performing compliance training, putting out fires, collaborating with the legal team, and changing collection methods. Despite how difficult it may appear for skilled debt collection organizations, this is a standard operating procedure.
The process also necessitates precise record-keeping and paperwork, which will be the cornerstone of any defense should the CFPB launch an investigation. These same records may be used as evidence in court in the event that the collection agency chooses to sue a consumer or support an unpaid debt as a tax write-off.
Cost Effectiveness
When done properly, establishing an internal collections department is comparable to launching a new business and necessitates the development of a comprehensive business plan. It is important to consider the costs of hiring outside consultants like lawyers and skip tracers as well as the costs of human resources, collection software and upgrades, phone systems, structural modifications or additions (such as remodeling, cubicles, and lockers for personal items like mobile phones not allowed in call centers), and structural alterations or additions.
Not to mention the effort and learning curve involved in creating the new department, such as creating the business strategy, getting the owners of the firm to accept it, hiring and training staff, purchasing software, and more.
Results of third-party Debt Collections
According to the “corporate Darwinism” principles, agencies must either produce successful outcomes or go extinct. Finance directors are drawn to third-party debt collection agencies because of their sweet spot of outcomes.
Top-tier agencies have a higher chance of recovering assets because they use cutting-edge methods and technology, have a strong grasp of time management, and offer comprehensive services like compliance and skip tracing. They should also be committed to respecting customers throughout the whole collection process while maximizing their client’s return on investment.
The Debt Collection Agency Advantage
Most trustworthy debt collection firms are members of the leading trade associations in the financial services industry. They also guarantee to give clients access to safe account information 24/7/365, comprehensive transparency, cutting-edge technology, uncompromising data security, brand protection, and provable results. The industries supported include those in education, healthcare, retail, energy utilities, telecommunications, and the auto industry, in addition to financial services and mortgages.
If your business is looking for a third party debt collection agency, give them a chance to earn your business by getting a reasonable quote from them right now.
