How To Run a Successful Debt Collection Agency
Hi, my name is Adam Stewart, Debt Collection Expert and owner of Debt Recoveries Australia.
It’s been 15 years now for me running a debt collection agency and guess what? I still love it. Yes, I love what I do and I am proud to say I am a debt collector and an expert in this field now.
Running a debt collection agency and being a debt collector is a rewarding, yet extremely stressful job. You certainly need a thick skin in order to succeed. Debtors are constantly ignoring you, disputing debts, or hanging up in your face. Some will even make it seem like it is your fault, even though you are just doing your job. You have staffing to worry about – too much work, not enough staff? or too many staff and not enough work? It’s a never-ending battle to find a balance. Lots of different clients with special needs? Another battle to keep all your clients happy all the time.
Assuming you are already up and running, the following are some tips that could help you along the way.
Top 7 Tips for Running a Successful Debt Collection Agency
- Start with the Best Staff
Have the best staff that you can afford and make sure you train them well. Be there for them and make them feel part of the team.
Teach your staff how to handle the stress, for instance, to take breaks between those nerve-racking calls. Something as simple as going outside and breathing in the fresh air for five minutes can make a world of difference. This will ensure your staff are as effective as possible with each communication you have with your debtors.
Teach them how to maximize contacting time. How agents spend their time is critical to the success of a collection agency. When an agent isn’t speaking with a debtor, an opportunity to collect on past due accounts is lost.
(See my previous blog on How to Be an Awesome Debt Collector)
- Good Debt Collection Software
Provide these awesome debt collectors with the best software you can find. We use Debtcol. It is user-friendly and has a client interface that is adaptable and is moving with the times. Find one that fits your business and one that your staff can pick up pretty quickly.
- Automation is Where It’s At
The biggest expense in any agency is labour – the more you can automate the repetitive tasks, the more money you save. Examples are automated SMS, letters, auto mailing, auto-diallers, and auto skip tracing.
Ensure the software you use is adaptable and able to be talk to other applications and software. It’s important to be able to use technology to automate any repetitive tasks.
- Reputation is Everything – Stay within the Law
Debt collectors sometimes have a bad reputation for harassing consumers. It could not be further from the truth, but just to be on the safe side, stay within the guidelines at all times. The ACCC Debt Collection Guidelines limits how collection agencies can collect a debt in order to keep them from being abusive, unfair, and having a deceptive or harassing behaviour.
Reputable debt collectors will try to obtain accurate and complete records. We qualify each debt before we collect, ensuring a contract of some sort actually exists and the debt is fair and reasonable. We do not attempt to collect debts that are beyond the statute of limitations. We will not harass or threaten debtors or treat them differently because of race, sex, age or other characteristics. We will not publicize any debts or try to deceive debtors in order to collect a debt.
- Always Be Prepared
You definitely cannot be over prepared when running a debt collection agency. Volume of work can increase very quickly in a short space of time, so you need to have systems and software in place to be able to expand easily. Similarly, during quiet times, you need risk management strategies to be able to de-scale quickly.
When collecting debts, it is also extremely important to have all the specific information regarding the debt you are contacting them about. Having all the facts close at hand also keeps you in control of the situation. Have all the contracts and invoices ready at hand, in case they are disputed.
- Always Be Positive
If you are the one in charge of your debt collectors, or running your debt collection agency, you are the one everyone looks up to for their drive and enthusiasm. Make sure you bring your “A game” at all times, even when you don’t feel like it.
Your emotional state or mood will transmit to the whole team, so you better make sure it’s a positive one. It will have a tremendous influence on how your debt collectors deal with the debtor, and in response to that, how the debtor will deal with your company. A good attitude goes a long way with debtors. Always keep in mind that they are dealing with an unpleasant experience, and you are the person that is offering them a solution instead of a problem.
- Make it Easy for the Debtor to Pay
You should have a click and pay page on your website to make it that easy for the debtors to pay. You should have a range of options, including credit card payment options. You should have an option that enables the debtor to lodge a financial statement and/or set up a payment plan. These should all be available online. If it’s not, it’s costing you and the debtor, time and money.
Wanna debt collect yourself? Sure, no one knows your business better than you, have a go.
See these links for some tips:
- Debt recovery – Increase your cash flow by recovering overdue customer payments
- Become a Debt Collector
Also see my previous post, 10 Tips to Become an Awesome Debt Collection Agent
Debt Recoveries Australia is the expert at recovering your outstanding debt without the drama. For more information, email at us firstname.lastname@example.org or call 1300 799 511. Talk to us about your debt collection concerns via Skype at debtrecoveries.