Questions to ask a commercial collection agency before hiring

A commercial collection agency is an agency that works to resolve debt between two businesses. Commonly known as B2B debt collections, it’s the process of mediating financial disputes and overdue invoices owed to a commercial client.

In many cases, these invoices and balances due can add up to a substantial amount of money. If, for example you are in manufacturing or distribution and you extend credit in the form of pallets of products, you’ll want to know how quickly you can get paid for those orders.

Because these invoices can represent large sums of money for an organization, many companies rely on the expertise of a commercial collection agency to improve cash flow.

If you are an organization looking to hire a commercial debt collection agency, here are a few questions you’ll want to ask before moving forward.

How do you treat our commercial customers?

No business, no matter the size, wants to lose a customer. But when we are talking about commercial debt collections, the amount being collected can be thousands of dollars if not more. Properly treating commercial customers is essential to retaining those customers. For example, if you are a food distributor, you have immense competition in your industry. Mistreating a customer can cause them to seek elsewhere. And they have many choices.

You must have a conversation with your commercial collection agency about how they approach your customers. It should be done with tact, respect and diplomatic communications. If your customers are not treated fairly, you risk losing substantial amounts of business.

You will preserve future revenue by hiring the right commercial collection agency.

Can you work on national commercial collection accounts?

Your organization will want to know if your chosen commercial collection agency can work in multiple states. Many companies that extend credit to other businesses do so in other states. And depending on the size of your company or the industry you are in, you could have customers across the United States. This is certainly not news to you.

But what is important when searching for a commercial collection agency is that they can serve you in numerous states. Sure, there are some collection agencies that do great work on a regional level, but when it comes to commercial accounts, you want to make sure that the commercial collection agency you choose has the resources you require.

What type of training do you provide your commercial debt collectors?

You’ll want to know that the commercial collection agency you choose provides ongoing and professional training for their debt collection staff and their customer service professionals.

Professionally trained debt collectors make a dramatic difference in the results you can expect from a collection agency.

Some of the training you should inquire about should revolve around how that debt collector communicates with your customers. As we mentioned above, how your customers are treated can make an enormous difference in terms of money collected and relationships preserved.

Your commercial debt collection professional should also have training in how to negotiate with your customers diplomatically. Because some balances may not be able to be paid in full, negotiating a solution to commercial debt is oftentimes the way to resolve that issue.

And because you may be sending commercial accounts to your collection agency in other states, you’ll want to know that debt collection professionals understand that there can be different collection laws from state to state. While there are differences in the laws that govern commercial collections and consumer collections, your collection agency should provide ongoing training regarding the legal aspects of collecting in other states.

What can we provide a commercial collection agency to improve our results?

If your organization wants to know what type of results you can expect from a commercial collection agency, the answer starts with your internal procedures.

Any type of documentation that helps validate a debt is important. That can include contracts, letters of agreement, purchase orders and of course accurate accounting. Your accounts receivable team should be able to provide everything your commercial collection agency will need to do their job well.

Other internal procedures that help improve results are on-time billing, cordial follow-ups from your team that might include letters and statements and diplomatic phone calls.

And of course, shorter times between delinquencies and debt collection activity. For example, submitting accounts to your commercial collection agency at 60 or 90 days can dramatically improve the results you see from collection activity.

Waiting extended periods of time only diminishes the results you seek from a commercial collection agency.

Do you want to learn more about how we work commercial collections and B2B accounts? Contact our team today!