You should be very selective when choosing a commercial collections
agency to collect your commercial debt. Selecting a commercial
collection agency based upon the lowest fee charged may not be the best
choice. No matter which commercial collection agency you choose, they
will impact your business reputation - for better or for worse.
Make sure the commercial collection agency has the skills, knowledge
and experience with commercial debt collection and your particular type
of debt. It is important for your commercial
collection agency to understand commercial collections.
While price is always a factor in making any business decision, it
should not be the only significant factor, particularly where other
important factors need also be evaluated. Most of us are familiar with
the old adage; "You get what you pay for." Lower commercial debt collection fees often
result in a collection agency scaling back its collections efforts. Commercial collection agencies are a business and
need to have a reasonable profit margin like any other business. Lower
fees often means that the commercial collections agency will cut back on
its collections efforts to reduce expenses and earn a profit.
Discuss commercial debt collection recovery rates and fees. Instead of a low collection fee rate a
creditor should focus on a metric called "net back." Net back means the
amount of money returned to a company from accounts placed for
commercial debt collection after the agency has been paid its
fee. This is cash that the company can use in its business. This is how
you should be evaluating a collection agency.