When your business contracts with another business, there's an expectation that both parties will honor their obligations, including paying on time. If your clients or business partners aren't following through, your accounts receivable department must devote time and resources in an attempt to collect. Or you can outsource the problem to a collections agency that focuses on this type of debt and respects your client/business relationship.
Here's what to look for in a B2B debt collections agency.
Experience & Training
Debt collections from businesses are dramatically different than debt collections from consumers. When hiring a debt collections agency, look for this type of experience and training:
- Specialized knowledge of your industry
- A history of collections in the age, balance, and type of debt for your business
- Training in industry compliance
- Customer service skills such as communication, de-escalation, and research
This expertise will provide peace of mind when collections agents are speaking to your customers.
Fees & Reporting Transparency
In most B2B collections situations, the fees are a percentage of the debt and contingent on the amount collected. If the collections efforts are unsuccessful, your business owes nothing. Collections efforts can also be documented and available to your business at any time so you can measure how it's going. Transparency provides you with details on collections tactics, how much you can expect to recover, and what you'll be charged.
Security & Licensing
When sharing client data with a third-party collections agency, the information must be kept secure and confidential. One way to ensure this is true is to ask questions about data security and licensing. Some states or cities require licensing in order to collect debt for others and to ensure they're a legitimate authority to collect on behalf of your business. Ask your potential collections agency if they're licensed and/or insured or if it's required in the cases they're working for you.
To learn more about how to choose the best B2B or commercial collections agency and the services offered during the collections process, download the free guide below.
