For various business organisations, big and small, across the globe, credit management is a serious issue that mainly concerns the collection of debts due from difficult customers. The sole purpose of this function is to maintain control over credit policies to mitigate potential risks and improve revenues. It might be perceived that most companies are capable of managing their own credits however, in reality; this apparently simple task often turns out as a job for professionals.
In countries like South Africa, you would find a significant number of agencies that offer credit management and risk mitigation services. As all of them cannot be reliable or trustworthy enough to do the job, you, as a business owner, would need to consider some facts. Below are some points to consider when making your selection of a suitable credit management agency.
Important Factors for Decision Making:
a. Understanding of the Industry: Before you appoint a credit management agency, you must be sure of the fact that they are well aware of the logistics of your industry and the corresponding business. Intricate matters, like paying invoices or providing debts under certain conditions varies significantly with the change of industry. That is why it is safer to select a management agency that covers an extensive range of industries. Without proper knowledge about your industry, the debt collection and risk mitigation process might be hindered every single step.
b. Experience of the Agency: Considering the experience of the agency you are choosing is of the utmost importance. With more experience, the debt collection techniques of a good agency become more sophisticated and effective. You will also be able to find out more about their previous successful cases and customer feedback on an experienced company’s website providing a clear picture of their service quality. Even local agencies with more experience can be better suited for your needs than an inexperienced national credit management firm.
c. Accreditation: Checking the accreditation and association with other companies would give you an idea about the legitimacy of the company you are choosing. If the agency is not accredited by a legitimate financial regulatory body, it is advisable to avoid that company. A licensed credit management firm is likely to offer a more effective service regarding this matter.
d. Collection Methods and Monitoring: Before making your choice, you would need to consider all the collection methods on offer. Various companies offer different collection methods starting from mediation to full-scale court proceedings. The credit managing company you choose must offer you the opportunity to track their progress anytime you want. Once you are given the opportunity to track the company’s progress, you can be sure of its transparency.
e. Price: Finally, the price demanded by the credit management agency must be reasonable. There are many companies that charge an extortionate amount of money, so, conduct thorough research to find the most affordable choice.
If you can take these points into account, finding a suitable credit management agency for the debt collection and risk mitigation of your company should not be a problem.