Collection Agencies do not all operate in the same way

We all like a good deal. We love to save money. So, while it’s tempting to choose a Collection Agency charges you less, it’s the net recovery rate that really matters.

Licensing
There are some key factors that drive the rates a collection agency charges. For instance, it costs time and money for an agency to obtain the proper licensing. Since licensing protects you and your business, it’s worth it to pay more.

Collectors and caseload
You’ll also pay more to partner with an agency that uses only experienced collectors. High caliber collectors will cost a little more but you’ll enjoy the benefits of a higher rate of collection. Savvy collection agencies will carefully restrict a collector’s caseload, too. By doing so, all cases, large or small, received the attention they deserve. This strategy requires that an agency hire more collectors and possibly charge a higher rate, but fewer accounts are turned over to legal.

Remittance
Some collection agencies that charge less do so because they only remit monthly. They hold onto your money and collect interest on it while saving themselves the expense of weekly remittance. Agencies that remit weekly may cost more but you get your money much more quickly.

Information
Collection agencies that invest in the personnel and technology needed to keep you in the loop on your account will also cost more to partner with. The type of software required to make your information available to you has a price tag.

When looking for the right agency, ask the right questions so you understand their rates. Are they licensed? Are their collectors experienced? How do they manage small balance accounts verses large ones? Do they remit monthly? Weekly? How many collectors touch each account? What are their communication policies? Do you have access to your information when you want it and need it?

You’ll pay more for the qualities that put an agency a cut above.