Some Important Reasons Your Business Should Consider International Collection Agencies
Given that the current economy is increasingly global, it’s important for managers to consider whether or not international collection agencies are necessary for their business. If your business has international clients, international debt collection may well become an issue at some point. Following are five things you need to know about international collection agencies.
The main thing to remember when you’re choosing international collection agencies is that local agencies that are familiar with the language, culture and laws of the country you’re collecting in will be most effective. Using a debt collector who knows that Brazilians speak Portuguese rather than Spanish, for example, is an absolute must.
Even if your international collections are limited to Canada and Mexico, though, you’d be surprised at how much the laws can differ. Hiring international collection agencies is really a must if you have any clientele outside of your country. The second thing you need to know is that one great option is to pick a firm that has local offices worldwide. It can be more efficient to hire one firm that’s able to provide the same local services as several smaller companies.
Because of the vagaries of international law, the third thing you need to know is that it’s best to hire international agencies that have lawyers on their staff. Laws change constantly.
That brings us to another important point: the best international collection agencies employ attorneys. In order to be effective, debt collectors they have to be familiar with local laws and with jurisdiction (the process of figuring out which laws govern an international transaction).
This being said, attorneys cost more than ordinary people when it comes to debt collection. If your receivables in a particular region are small, it may make more sense to just write off the debt, but once they reach critical mass you get more benefit than cost out of using an international firm.
The third thing you need to know about international debt collection is that they can specialize in different industries. When you’re interviewing potential agencies, make sure that not only do they have lawyers on staff and deal with the country you need to collect in, but that they have experience in the industry you’re in as well. Collections for, say, a consumer electronics company can be very different than the process for services-oriented industries.
Finally, discuss fee arrangements with the international collection agencies ahead of time in order to determine which ones to hire. Some collection agencies ask for an upfront fee, but most will ask for a percentage of the recovery. This is an excellent option that’s preferable for most people because it means you don’t pay unless they’re successful, so they’re betting their fee on their ability to bring you good return. Unless you can’t find international collection agencies that meet the above criteria and take a contingency fee, there is no reason whatsoever to have to pay upfront fees for debt collectors, so choose accordingly.
