Don’t Trust Your Business to Just Anyone: Demand Superior A/R Service and Unparalleled Customer Service from your Agency
By: Tom Brenan, President & CEO, Altus Global Trade Solutions
1) Experienced recovery agents and past performance
When choosing a builder, you would want to see a project portfolio, verify references and work history and identify their level of expertise. You should require the same standards when evaluating a collection agency. Ask these questions:
- Does the company specialize in commercial collections? Consumer debt collection agencies collect debt from an individual and return it to the business, where as commercial collection firms manage business-to-business debt collection. Commercial collection agencies are highly specialized and have greater flexibility in their collection practices, allowing them to take a customized approach depending on the type of claim. Additionally, most commercial collection firms use a refined and tactful method to ensure the business relationship between their client and debtor company is not harmed.
- Is the agency capable of collecting international debt? It’s wise to choose a firm with the ability, understanding and legal expertise to collect in all 50 states and abroad.
- Does the agency have a proven track record of at least five years? Experienced agencies are often more successful in recovering past due funds.
- Can the company provide an extensive list of references that can testify to its successes, reporting, payment remittance, professionalism and responsiveness? Recommendations from satisfied clients should be one of the highest business achievements possible.
- What experience and types of training do the agency’s recovery agents maintain? The collection firm should believe their recovery agents are the core of its business. To be successful, agencies must have the most professionally trained agents in the industry.
- Does the company remit more than once a month? These practices can vary greatly. Choose an agency that will remit based on when funds are actually received from debtors.
2) Adequate licensing, bonding and insurance
It would be risky to select a builder with insufficient licensing, bonding, and insurance. You’d choose a “safe” contractor with superior business practices to mitigate risk. The same is true for accounts receivable management services. Use the following as guidelines in your selection process:
- Licensing: Ensure the agency of choice holds a current license in all states required which requires testing in the certification process and participation in annual audits. Ask for written proof of licenses.
- Bonding: Guarantee the agency maintains a minimum security bond of $300,000 for the protection of the creditors it serves. Ask the firm to provide a proof of bonding prior to business engagements.
- Insurance: Confirm the agency maintains a minimum of $1 million in professional liability insurance. If your agency does not have liability insurance, and they do something wrong, it is possible your debtor could sue you for damages.
3) Industry-approved certifications
Construction industry certifications demonstrate a builder’s ability to excel in the trade’s practices and performances. Certifications validate professionalism, require additional training, and demonstrate superior business practices. Endorsements from associations also help validate industry accountability. Check to see if your agency maintains these significant and distinguished accounts receivable management industry certifications:
- Commercial Law League of America (CLLA) certification attests that it can provide you with the bond coverage, oversight and dispute resolution services that most credit grantors desire.
- International Association of Commercial Collectors (IACC) certification assures you that the firm’s collectors are in compliance with state laws and regulations. Collectors and managers must individually pass examinations and participate in continuing education and training.
- American Institute of Certified Public Accountants’ Statement on Standards for Attestation Engagements (SSAE) Type II audit and certification examines an agency’s controls, processes, policies, personnel and operational activities. This certification distinguishes an agency within the collections industry and represents a significant achievement.
4) Comprehensive suite of services
If you want a properly finished home, you’d select a builder who has experience in all trades from roof shingles to HVAC installation. Throughout the build, if questions or issues arise, your contractor is your trusted expert. Likewise, your collection agency should offer a comprehensive suite of services that demonstrates the ability to support your business every step of the way. Here are a few vital services your agency should provide:
- Business Credit Reports: Granting credit to your customers should not be a gamble. Business credit reports evaluate a company’s creditworthiness by assessing credit risk score, payment trends, public record information, and company background data.
- Trade Data Reporting: This service gives you the opportunity to report your customers’ trade payment data to the three major commercial credit bureaus. By reporting your customers’ trade payment data, you get paid faster. Your customers are rewarded with a positive line on their credit score, which helps them grow their business and ultimately do more business with you.
- Pre-Collections: This is an advanced recovery model that helps clients manage their accounts receivable from their “good customers.” While in the pre-collections phase, debtor companies are contacted by representatives, not collectors, to politely create a sense of urgency toward the outstanding balance. This process is proactive and resolves most accounts before reaching the collections phase.
- Litigation: If the collection agency is unable to reach a satisfactory resolution, a legal course of action may need consideration. Partnering with an accounts receivable firm that has litigation experience provides a seamless transition and saves you time, money, and energy.
- Bankruptcy Services: Unfortunately, bankruptcy is sometimes a reality. The process is becoming more challenging and complex, consuming time and resources. Partnering with a collection agency that specializes in bankruptcy services will help you retain your hard earned revenue by providing legal guidance and case management.
5) Expect unparalleled customer service
While experience and qualifications are essential when building a home, you should also demand a high level of customer service from your builder. You need a contractor that will listen to your needs. The same holds true for a collection firm. Find a company that understands your situation, listens to your list of requirements, and helps you achieve your business goals with a carefully crafted plan. It takes more than just “knowing” the accounts receivable industry. Connect with a company that is equally invested in building your business on a solid foundation.
About Thomas E. Brenan, IV
Thomas E. Brenan, IV, President and Chief Executive Officer of Altus, is responsible for the strategic development and management of Altus’ receivables management and commercial debt recovery business line in the United States and Canada. Altus is a global provider of products and services to protect, manage, monitor and collect commercial accounts receivable. Previously, Brenan was Chief Operating Officer and a founding member of Newton & Associates, a commercial collection agency that was acquired by Altus in 2006.
Brenan’s business management and collection experience spans 20 years. He supervised the accounting department of Napoleon Services, a subsidiary of Cargill, Inc. He worked at Arthur Young & Company, and also served as Chief Financial Officer for the central region of one of the country’s largest collection agencies.
A native of New Orleans, Brenan is a Certified Public Accountant, receiving his BS and CPA certification from the University of New Orleans. He also earned a Master’s in Business Administration degree from the University of New Orleans.
Brenan is based in Kenner, Louisiana, and oversees Altus’ operations in Kenner, East Windsor, NJ; Denver, CO; Vancouver, WA and Toronto, Ontario.