No matter what type of business you operate, you are almost certainly bombarded with more pressing issues than debt collection on a daily basis. One of the best ways to handle an overwhelming amount of responsibility is to delegate other people to handle some of it for you.
The key to successful delegation in any business operation lies in checking to make sure that the delegated work was completed according to the correct procedures. When it comes to debt collection, following procedure is not just good practice. It’s the law.
If you have trusted employees that act as debt collectors for individuals or companies that you do business with, it is essential that you make sure that they are compliant with all state and federal regulations. You will also want to make sure that they are collecting according to your company’s policies and procedures. Having the ability to check up on your employees’ collection efforts will give you peace of mind that they are being conducted in an appropriate fashion.
Here are three simple ideas that will make it easier to ensure that debt collection for your company is being handled appropriately:
Establish Specific Procedures
The first step in being able to check up on the work of your collection agents is to require them to perform different collection tasks in a very specific manner. Every employee that handles any aspect of debt collection for your company should be fully aware of the regulations that govern commercial debt collection and the penalties for failure to comply with those regulations.
You should have specific procedures in place that require each of your employees to follow these regulations. You should define specific procedures that you expect your agents to follow like properly identifying themselves, describing the details of the debt, and explaining the payment options.
Documenting Interaction with Debtors
Once you establish specific procedures that your employees must follow, you will want to be able to check to make sure that they are following those procedures. This will require the ability to review their interactions with debtors.
By requiring your collection agents to file copies of any collection letters and recordings of phone conversations, you will have access to evidence on exactly how accurately they are sticking to your policies.
Checking the Evidence
If you had to check over all of the interactions that occurred between your employees and your debtors, then you would be better off collecting the debts on your own. However, random spot-checking of these interactions can be just as effective as covering every detail. Simply glancing over a random selection of collection documents will allow you to quickly scan for red flags.
In most cases, the employees that you trust and train to help you with collecting outstanding debts will do everything in their power to follow the proper procedures as you define them. However, it is your reputation on the line if they do not. Keeping tabs on how they go about the collection process might feel like spying, but it will be much better for you to find a compliance violation than to hear about it from an attorney.
If you are not willing to make sure that your employees are following proper procedures, you might be better off turning your collection accounts over to a commercial debt collection agency. Many agencies offer debt collection rates that end up costing less than attempting to keep collections in-house.