Hello Finance Manager! What should I know about debt collection agencies?

Hello Finance Manager! What should I know about debt collection agencies?

Hello Finance Manager!

I’m located in California (if that makes a difference). Like many other people, I decided to live the dream and start my own business. I’ve been working to run and grow my digital marketing firm for about five years now. This month’s projection for revenue is twice of what we made last month. While that’s great news, I think that I should be proactive and start looking into debt collection companies. Thankfully, we’ve not had an issue of being stiffed on our any of our accounts. Yet, I know that it’s a problem that could happen to the company at any time in the future. So, my question for you is what I should know about debt collection agencies.


Busy in the Bay

Hi Busy!

We’re glad to read that you’re having a fairly good run in your business. We’re also glad that you’re looking into collection agencies before you need one. Just keep in mind that even after you settle on a prospective partner, you should review that company again before you engage them. Unfortunately, there are firms who may seem to be doing a wonderful job in the industry who end up having a problem. Since their problems can affect the reputation of your business by association, it’s important to always stay on top of the goings-on in the industry.

Debt collection agencies are not required to be members of any type of organization. So, when you see an agency with an accreditation (Clients A.R.M. is associated with ACA, WCA Washington, and HFMA), you should call the organization and ask if the agency is a member in good standing.

However, don’t just stop there. Make sure that there are no complaints or lawsuits with your state or in the state that the collections attempts will take place. Ensuring that the collection agency that you want to use is compliant in both federal and state law is a good step that you can take to protect your company. That brings us to our next piece of advice.

The collections agency that you’re interested in using should be licensed. Each state has its own licensing process. Collections agencies can only perform collections in states that they are licensed.

Ask for recommendations from other industry professionals. Word of mouth is often the best way to find a trusted source of help. Ask other business owners who they use for collections. That can help you come up with a good starting point.

We hope this helps! If you have any more questions, give us a call. We’d love to help you!