How to Choose a Commercial Debt Collection Agency

Commercial debt is debt owed or due by a business. If your company has debtors, it can be beneficial to you if the debt collection is handled by a professional rather than yourself. Instead of focusing on the debt, you can focus your time on other aspects of your business. Here are some things to look for when you want to know how to choose a commercial debt collection agency.

Steps

    1
    Check to see if the company is licensed.
        When looking at commercial debt collection agencies, make sure that they are licensed. If they are not licensed, you may be held liable if they end up violating any collection laws. They should also be licensed in all states, not just your home state. Laws can vary between states, and if your debtor relocates, it is important that the agency you choose can collect from them across the state line.
    2
    Make sure that the company is bonded and insured.
        It is important for the agency to be insured in case something goes wrong. It is also important that they are bonded in case of a lawsuit, when you will want to make sure that the collection agency has the resources to handle it without jeopardizing your business.
    3
    Ask the agency about their fee structure.
        Different companies will charge you in different ways. Some will charge you upfront and ask for a flat fee. Others will take a percentage of the money that they recover from your debtor. This can be good because you pay less upfront, and will only have to pay when they complete their duty by collecting your money. On the other hand, if the debt you are recovering is big, or if there is more than 1 company to collect from, you may benefit from paying a flat fee upfront. The fee may be less than a percentage of the final monies collected.
    4
    Find out if the company offers debt portfolio screening.
        A few commercial debt collection agencies will offer debt portfolio screening. This tool allows the agency to monitor your debt with scoring software. It can also help predict which debt accounts are more likely to pay and which will be more difficult.
    5
    Determine if the agency lets you view your account online.
        Though they are handling your account, you want to be able to keep an eye on it as well. Online access and up-to-date information are good for letting you monitor your account and debtors.