How To Choose The Right Commercial Debt Recovery Partner
Choosing the Correct Commercial Debt Recovery Partner
When you hear “Debt Recovery” it automatically paints a picture in your mind, which is not always a good picture. Unfortunately, the industry has a very bad perception and stigma attached to it and in some cases this perception is understandable. This perception is partly due to media hype and the unfortunate truth that there are some debt recovery companies out there that operate unethically and unprofessionally. Deciding to outsource your overdue or problem accounts on its own can be a big decision for a business let alone trying to select the best “Commercial Debt Recovery Partner” for your business.
The Commercial Debt Recovery Partner you select should act as an extension of your business and should do everything to represent your brand and protect your current and future relationships with your customer in the same way they would if they were part of your business. If you select the correct partner they can not only offer you convenience but can be of great benefit to your business long term.
We have identified some key areas you should be looking at when deciding on the best Commercial Debt Recovery Partner for your business:
Reputation and Length of Service
There is no better way to judge the success of a company than to listen to what the company’s clients have to say about it and by the types of clients they have. Look at the company’s website you are considering to see their client testimonials or case studies to see what their clients are saying about them and don’t be shy to ask about other clients and if you could speak to any of them to get their opinion on the service. Do a general search on the internet on the company to see if there are any news articles, forums or articles talking about the company.
Consider the company and directors history, have they been successfully trading for a number of years? Is this the only Commercial Debt Recovery Company the directors have owned? Companies who are acting unethically or unprofessionally usually have a history of some sort and we have seen the unfortunate situation that after their behaviour has been brought to the attention of the of customers, the industry or the media they liquidate the current company and set-up the next day under another business name.
The Right Fit for Your Business
We use the phrase “Commercial Debt Recovery, Partner”, as this is very important the commercial debt recovery company you use should be an extension of your business and they should work with you at every stage to ensure the approach they take is in line with your company values and ethics, but equally your business should fit with their values and ethics.
Protection of your Brand and Customer Relationship
Maintaining a relationship with your customers should be the priority and at the front of the commercial debt recovery companies mind when recovering your commercial debt as you have made a commercial investment with your customers and want to protect that for current and future sales.
Transparent and Open – A Clear Charging Structure and Approach
Most commercial debt recovery companies work on a “No win, No fee” basis meaning that you would only have to pay fee’s upon successful recovery, however, a rate should be agreed at the outset so that when the commercial debt is recovered you know what the cost would be to you and there are no surprises. As well as agreeing the costs that would be chargeable upon successful recovery the company should also be advising and then applying the Late Payment of Commercial Debts (Interest) Act 1998 which entitles you to claim interest, compensation and reasonable costs when someone doesn’t pay.
The company should also be open and upfront with you and tell you within 48 hours the situation of the debtor and the likely outcome of the case.
Many commercial debt recovery companies offer a service where they will charge an upfront fee with the promise to recover any overdue or problem accounts you have within the year, this type of offer should be considered with caution as you are paying for a service you haven’t actually received yet.
The needs of the client should be considered at every step of the process and the company should be courteous in every single contact made with you the client or the debtor and should their clients how they would want to be treated.
Separate Client Account
Although it is not a legal requirement to have a separate business and client account, it is good practice to hold the money you collect on behalf of clients in a different account from the businesses bank account, as this money belongs to the client and not the business.
The company you decide to choose should have great results and work to collect the debt quickly and correctly for you. Using their knowledge and experience in both Credit Control and your industry to collect in a courteous and conscientious way.
We hope that this article has been useful in helping you select the correct Commercial Debt Recovery partner for your business. If you would like to discuss any of your Commercial Debt Recovery requirements, please contact us and we can discuss or advise you on your situation. Contact us today on 01698 821 468 or [email protected] and speak to our Credit Management Consultants today.