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How to Optimise The return on Your Relationship with A Debt Collection Agency (Part 1)

Businesses often opt to partner with a debt collection agency to boost recoveries, reduce their DSO and minimise bad debt write-offs. As with any investment, business owners naturally want to get the most out of the time and money they spend collecting funds. So what can you do, to ensure that you get the biggest bang for your buck when utilising the services of a debt collection agency?

As we have discussed in previous posts, choosing the right debt collection agency is obviously crucial to the success of your debt management processes, as their expertise, methods and approach will have a significant bearing on their results. But what you do to support your agency can equally affect the quality and consistency of the results you achieve.

This post is the first of a three part series which will explore simple things you can do to enable your debt collectors to recover more of your outstanding funds, faster.

 

What can impact your debt collector’s chances of success?

Actioning Your Debts Quickly

It is a well-known fact that the longer you leave a bad debt, the worse your chances of recovering it become. You have the highest chances of collecting a debt within 30 days of its due date. As it ages beyond the 60, 90 and 120-day mark, your prospects of recovering anything are severely jeopardised. If left for years, a debt can even come statute barred meaning you have lost your right to recover it completely.

What you should do: Establish an in-house process which requires defined actions to occur at precise times on an ageing schedule.

For example, a business with 30-day trading terms may institute the following protocols:

  • 30 days – Email payment reminder
  • 40 days – Phone call to request payment and determine cause of delay
  • 50 days – 2nd email payment reminder
  • 60 days – Post payment reminder
  • 65 days – 2nd phone call to request payment
  • 75 days – Letter of demand requesting payment to avoid referral to debt collection agency
  • 90 days – Refer to debt collector

 

Read Also: The Importance of Maintaining Positive Client Relations Throughout Debt Recovery

 

Providing Sufficient Documentation And Evidence

The more evidence you provide to your debt collection agency with regard to a debt, the better they will be prepared to handle it and recover it in the most effective way. Documentation is not only required to prove to the debtor what is owing. If legal proceedings are instituted, you will need to prove it to a judge. Your case will either succeed or fail based on the documents you can produce to prove the debt exists as you allege.

It is also vital that all information and documents relating to the debt are provided with your initial instructions so that there is no delays or confusion. Your agent will be fully prepared to dive in and handle any issue or challenge raised by the debtor.

What you should do: Ensure the following documents are provided with your instructions to your collection agent:

  • All relevant invoices that are outstanding
  • Any contract or agreement you have with the debtor
  • Copies of your terms and conditions of credit or trade
  • Any guarantee is given on the debtor’s behalf
  • The debtor’s original credit application, and
  • Any correspondence relating to the debt or any dispute surrounding it.

 

Stay tuned for part 2 of this series for more tips on how to help your debt collection agency, help you.

If you would like to learn more about the debt collection services we offer, contact us now. We have over 30 years of experience providing professional and discreet debt collection solutions for clients of all sizes and across all industries. With debt collection agencies in Sydney, Melbourne and Brisbane we have the east coast covered.

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  • I have known the principal of the BOSTON Group (Derryn HARRISON) as well as key staff members (including Ben GOWER) for well over 2 decades and have been using their professional services for myself as well as for Powerhouse Logistics Pty. Ltd. on a regular basis, not only in Sydney but on a national basis.

    At all times BOSTON have been extremely pro-active, attentive, courteous and professional with all matters we threw at them. Their advice has always been extremely sound and commercial and I find them to be a "breath of fresh air" within the legal fraternity and have no hesitation whatsoever to highly recommend them.

    Peter Brueckner

    Powerhouse Logistics Pty Ltd (CEO)

  • Expect A Star has worked with The Boston Group for 10 years. In this time we have appreciated the ongoing support of Boston for all of our collection and legal requirements. Like most businesses cashflow is critical to ongoing success and growth, with Boston we have found a partner who are an extension of our business and play a key part in our cashflow management. The Boston Group bring a level of expertise to our business which is valuable and coupled with their excellent customer service we look forward to continuing to work with them for many years to come.

    Ryan Meldrum

    Former CEO

  • I have been using the services of The Boston Group and their legal entity for over 11 years. During this time I have found their service to be impeccable, delivered with the utmost professionalism and integrity. The vast majority of cases that I have placed with Boston were far from straightforward, requiring legal acumen and delicate handling. Having used all methods available without success to procure payment, I confidently placed these matters into their safe hands. In all instances a successful outcome was achieved.

    Mark Parish

    Credit Manager

  • SNP Security has had the pleasure of working with Boston Commercial Services for the past 11 years. Boston has played an integral part in the continuing success of SNP Security’s low DSO’s, 90 Day % Debt & of course Bad Debts Written Off.

    Amanda Griffiths

    National Administration Manager

Boston Commercial Services is well known debt collection agency in Sydney, Melbourne and Brisbane who has long experience in debt collection.