If you've made the commitment to using commercial debt collection, you may be wondering whether or not it's necessary to employ international collection agencies if some of your clients are overseas. Following are some questions that will help you decide whether international collection agencies are necessary, or if you can handle your own international debt recovery.
First, what is the percentage of your receivables that come from other countries? If you have one or two clients on other continents that are slow payers, it may not worth the time and effort to hire an international firm just for them. However, if a significant portion of your receivables come from other countries, it very well may be.
International debt collectors that you hire represent you, and can make a big difference in your reputation in certain markets. It's absolutely imperative to hire one that fits in with local business practices. Professional but firm is the sweet spot; debt collectors need to avoid upsetting your clients while still remaining effective, and understanding local customs is an important part of that.
Beyond cultural sensitivity, international collection firms tend to be familiar with local law. Jurisdictions and processes can vary, and in order for your collection calls to have bite, they have to have the force of the law behind them. Employing collection agencies with local attorneys on staff is a must. Getting a collections call from a foreign country is not threatening to most people, while getting a call from a local attorney is.
Some international collections companies may have offices scattered throughout the world, while others may specialize in one location, so you may need to hire more than one to cover all the areas you service. This is not a problem, as it's common practice to spread collections out amongst several agencies anyway to enhance the chances of recovery.
Some internationally minded law firms these days hire attorneys who are admitted in more than one country, but it's more common to use local affiliates. Either way, you need to make sure the attorneys your international debt collection agencies are using are actually admitted to the bar in the countries you're collecting in.
In some cases, your clients may fit all three of these profiles. It is best to have one agency per region do collections, so choose international collection agencies that have experience with all three types of debtors if you fit this profile.
Another important question to ask yourself when trying to decide if international collection agencies are for you is whether or not you will be applying for any commercial loans in the near future. It is important in the process of getting a commercial loan to show that your receivables are in good shape. Even if you normally don't need the services of international collection agencies, you may want to consider employing them for a period of time before you apply for the loan in order to make your cash flow look better.
First, what is the percentage of your receivables that come from other countries? If you have one or two clients on other continents that are slow payers, it may not worth the time and effort to hire an international firm just for them. However, if a significant portion of your receivables come from other countries, it very well may be.
International debt collectors that you hire represent you, and can make a big difference in your reputation in certain markets. It's absolutely imperative to hire one that fits in with local business practices. Professional but firm is the sweet spot; debt collectors need to avoid upsetting your clients while still remaining effective, and understanding local customs is an important part of that.
Beyond cultural sensitivity, international collection firms tend to be familiar with local law. Jurisdictions and processes can vary, and in order for your collection calls to have bite, they have to have the force of the law behind them. Employing collection agencies with local attorneys on staff is a must. Getting a collections call from a foreign country is not threatening to most people, while getting a call from a local attorney is.
Some international collections companies may have offices scattered throughout the world, while others may specialize in one location, so you may need to hire more than one to cover all the areas you service. This is not a problem, as it's common practice to spread collections out amongst several agencies anyway to enhance the chances of recovery.
Some internationally minded law firms these days hire attorneys who are admitted in more than one country, but it's more common to use local affiliates. Either way, you need to make sure the attorneys your international debt collection agencies are using are actually admitted to the bar in the countries you're collecting in.
In some cases, your clients may fit all three of these profiles. It is best to have one agency per region do collections, so choose international collection agencies that have experience with all three types of debtors if you fit this profile.
Another important question to ask yourself when trying to decide if international collection agencies are for you is whether or not you will be applying for any commercial loans in the near future. It is important in the process of getting a commercial loan to show that your receivables are in good shape. Even if you normally don't need the services of international collection agencies, you may want to consider employing them for a period of time before you apply for the loan in order to make your cash flow look better.
About the Author:
David P. Montana has been a noted industry expert, business consultant and author in collection agencies services for thirty years. He offers additional helpful tools and information on international collection agencies.
No comments:
Post a Comment