Collection Agencies Working For Credit Departments

Advice For
In-House
Debt Col­lec­tion

Col­lec­tion Agen­cies Work­ing For Credit Departments

By Dean Kaplan

It is very com­mon for Credit Depart­ments to hire col­lec­tion agen­cies to assist them in their debt col­lec­tion efforts. Often, if a credit department’s own col­lec­tion efforts are unsuc­cess­ful, this can be a pos­i­tive next step. This is the first arti­cle in a four part series of arti­cles which will look at the credit depart­ment in the com­pany set­ting and its need to view the other inter­nal depart­ments it deals with as inter­nal cus­tomers. In addi­tion, the arti­cles will explore the role of col­lec­tion agen­cies and how their deal­ings with clients’ debtors can affect inter­nal cus­tomer satisfaction.

“Cus­tomer sat­is­fac­tion” con­tin­ues to be a buzz word in busi­ness today. It is impor­tant to be aware that depart­ments within com­pa­nies have inter­nal as well as exter­nal cus­tomers. This is espe­cially true for the credit depart­ment. Agen­cies when act­ing as debt col­lec­tors for credit depart­ments must also be well aware of these inter­nal and exter­nal cus­tomers. How col­lec­tion agen­cies deal with debtors (exter­nal cus­tomers of the clients) can affect many dif­fer­ent inter­nal cus­tomers at their clients’ companies.

Col­lec­tion agen­cies play a cru­cial role in the day-to-day busi­ness of many types of companies.

Cus­tomers are sat­is­fied when their needs and expec­ta­tions are under­stood and met or even exceeded. In addi­tion, in the busi­ness set­ting, this needs to hap­pen at the same time that resources are opti­mally uti­lized. In other words, the com­pany isn’t los­ing its shirt in its effort to sat­isfy its cus­tomers. Many com­pa­nies have devel­oped strate­gies and processes to sat­isfy exter­nal cus­tomers. How­ever, fewer com­pa­nies have put the same effort into max­i­miz­ing inter­nal cus­tomer sat­is­fac­tion. One inter­est­ing thing to note is that when inter­nal cus­tomer sat­is­fac­tion is high, gen­er­ally the oper­a­tion runs effi­ciently and pro­duc­tiv­ity and morale are high. These three things in com­bi­na­tion are known to pos­i­tively affect a company’s bot­tom line.

When a com­pany is look­ing for over­all cus­tomer sat­is­fac­tion, this requires that all employ­ees work together and assist each other to max­i­mize exter­nal cus­tomer sat­is­fac­tion. Since the only way for all employ­ees to work together well, is for inter­nal cus­tomer sat­is­fac­tion to be high as well, it becomes clear that over­all cus­tomer sat­is­fac­tion requires both inter­nal and exter­nal cus­tomer sat­is­fac­tion. The two go hand in hand. When we add the col­lec­tion agency into this pic­ture, the agency must also be pro­mot­ing cus­tomer sat­is­fac­tion with debtors, as well as pro­vid­ing the credit depart­ment with all the infor­ma­tion needed to com­mu­ni­cate with its inter­nal cus­tomers through­out the company.

The wide range of job duties relat­ing to the credit, col­lec­tion and accounts receiv­able areas require the credit depart­ment to fre­quently inter­act with both exter­nal and inter­nal cus­tomers. For this rea­son, it is extremely impor­tant for the credit depart­ment to fully under­stand the roles of other depart­ments through­out the com­pany with exter­nal cus­tomers and with each other as it relates to exter­nal cus­tomers. For exam­ple, if the credit depart­ment decides to put a credit stop on a cus­tomer who isn’t pay­ing its debt, this will affect the ship­ping depart­ment because any fur­ther ship­ments will be stopped until the pay­ments begin again. In addi­tion, the sales depart­ment needs to be told, because it makes no sense to accept new orders, if no ship­ments are going out. If you add the col­lec­tion agency into this sce­nario, the debt col­lec­tor needs to be informed because he or she can then com­mu­ni­cate with the debtor, and use the credit stop as pres­sure to moti­vate pay­ments to be made. When all the cus­tomers, inter­nal and exter­nal, are work­ing together, the com­pany oper­ates like a well-oiled machine. When the pieces aren’t work­ing together, the whole thing can come to a screech­ing halt and frus­tra­tion is likely to run supreme. Clearly, over­all cus­tomer sat­is­fac­tion is a wor­thy and nec­es­sary goal for any com­pany to strive for.

If you would like to con­tinue to Arti­cle two in this four part series, click here Col­lec­tion Agen­cies And Credit Depart­ment Inter­nal Cus­tomers. In this arti­cle, we will learn how to iden­tify all the inter­nal cus­tomers of the credit depart­ment, as well as how agen­cies can help credit depart­ments max­i­mize cus­tomer sat­is­fac­tion with its inter­nal customers.

The Kaplan Group is a bou­tique col­lec­tion agency spe­cial­iz­ing in large (over $10,000) debt col­lec­tions due from busi­nesses. Founded in 1991, the com­pany has a stel­lar rep­u­ta­tion (A+ rat­ing with the Bet­ter Busi­ness Bureau) and is rec­og­nized as one of the lead­ing col­lec­tion agen­cies for results on large and com­plex mat­ters.

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