Credit Managers are looking for an agency that will get
their invoices paid as quickly as possible for as little expense as
possible. Aside from that they might be
looking for the following:
1. Professional
service – the Agency is still acting as an agent of the company
2. The
Agent is compliant with all the applicable laws and all legislative acts so as
to not put the company in a precarious position of liability
3. The
Agent is licensed, bonded and insured
4. The
Agent has staff with industry specific collection experience – A Credit Manager
would be much more comfortable that an account is dealt with properly knowing
there is prior knowledge of the industry
5. The
Credit Manager needs to know how the Agency instructs their staff regarding
collections – are they aggressive; do they only make 1 call a week and move on
with or without an answer; do they only send demand letters and quit after
there is no contact; do they play the “numbers game” or do they provide more of
a service to their customer; do they treat a small account with the same effort
as a large account
6. The
Agent has proper geographic coverage the company requires
7. The
fee is competitive as uncomplicated as possible – a sliding scale can be
confusing and all a Credit Manager wants to know is, what the cost is at the end
of the day, for submitting the file. A
Credit Manager would also want the ability to negotiate a “Special” fee for
unusually large accounts that may be submitted
8. Agent
invoices and/or issues customer payments to the company on a regular
basis. The Credit Manager usually must
code the collection costs back to the original Cost of Goods Sold (the original
G/L) to where the original charge came from so it’s important to understand how
the invoicing needs to be done. The
longer the Agency holds a customer’s payment, the longer the Credit Manger is
without their money
9. Ease
of retrieving information on an account submitted for collections – how can
they review the accounts submitted to the Agent. What is optimal to some Credit Managers is to
be able to review the work done online – they may also be able to enter new
information they have received and need to give to the collector assigned. It is difficult to work via phone sometimes
due to time constraints and being on the phone – it can often be days before
you can connect to each other and it might be too late dependant on the
information
10. How
and when the Agency determines when to recommend placing and account with a
Collection Agency – it is important to retain a Collection Agency that has the
same mind set as you do. An experienced
Credit Manager will want to retain an Agent that will do the best thing for
their customers and not for themselves.
The Credit Manager will want to be assured that the Agency is acting in
their best interests and that includes the issuance of accounts
11. How
and when the Agency determines when to recommend placing an account into Legal
status. An Agent should not waste time
and effort on collections when they know from researching the company there is
no chance of payment forthcoming. The
Agent should identify this issue with the Creditor as soon as possible for the
Creditor to make the decision of Legal or Write off
12. Every
Credit Manager might want something tailored to them when issuing an
account. Every Credit Manager will say
they are busy BUT they still need to
report to their superiors what is happening on an account. It is sufficient at the initial placement of
an account to the Agency, to indicate to their superiors that an account is
“Placed for Collections” but after a while, a review needs to be done to decide
whether the account is collectible or if the account is to be written off and a
decision made regarding how any future recovery would be recorded. The Company Policy should define this but it
may not. It is important for the
Collections Agency to be upfront and timely with their findings regarding the
account submitted for collections
a. What
is the likely hood of getting any payment if not the payment in full including
any historical collections/legal’s and their outcomes
b. If
an account is uncollectible by Collection means, offer another possible avenue
to collect the funds (Civil Claims or Court of Queen’s Bench) and the potential
cost to your customer if they decide to go that route. It can be the case that a Collections Agent
has a legal person on staff/retainer to do Civil Claims which is less costly
than the Company would pay having to hire their own lawyer.
c. Decide
how long the Agency keeps the account active and what happens if they close the
account
i.
If an account is closed with the Agency, what
shows on the customer’s credit bureau and how does that affect them
d. How
does the customer want to handle potential disputes the Agency uncovers
13. Does
the Agency belong to any Credit Associations?
Some Credit Managers may find this important and others may not be
interested. An affiliation with a Credit
or any other Association indicates the Agent is either becoming or is well established
in the community where they are located.
This can make a Credit Manager comfortable in knowing the Agent has some
longevity and investment in the community and their actual existence
14. Does
the Agency have any references? A
Credit Manager is more apt to retain an Agency’s services if their industry
peers have had success with them.
It is important to remember that a Credit Manager uses
outside sources to make their lives easier, not more difficult. They don’t want to have to work out a calculation
at the beginning or the end of the issuance of a file to the Agent.
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