Your debt collection policy is equally important as any other contract that you use for your business. This policy sets the standard for all account holders and debt collection agents that you work with to ensure that the rights of all parties are protected, and are being treated fairly. If you already have one in place, consider reviewing it regularly to ensure that it covers every aspect of your debt collection process, and is tailored to the stage of business that you currently are at right now.
It is important to note that these policies should be flexible enough that they are able to grow with your business. This concept further amplifies the need for consistent review processes that keep your documentation up to date and relevant to both your business and your customers.
Below are core elements that you should consider when creating your debt collection policy:
1. Dispute resolution measures
Inevitably, through the debt collection process, you may encounter a situation that requires advanced dispute resolution to completely resolve. Your client-facing policy should clearly outline your rights and obligations as a company to work with the client to resolve any further issue, considering the limitations and preferences of any outsourced debt collection entities that you are currently using. You may also create an internal workflow and policy for employees to follow to ensure that your brand is protected throughout the process at all costs.
2. Debt collection timeline for contact
Contacting your delinquent customers is an important part of the debt collection process. In Canada, there are certain steps and durations of time that must pass between each attempt in order to comply with consumer protection laws. Your policy should include a clear and concise timeline for contact, highlighting its adherence to currently standing laws in your province and country.
3. Case abandonment requirements
While this is never a reality that you wish to encounter throughout the debt collection process, this is generally inevitable. You are dealing with individuals who likely are indebted to others as well, with emotions or responses that are likely exacerbated by external crises and financial strain: such as the COVID-19 pandemic, life, or employment and pay changes. There may be times when an account cannot be brought to full currency. In cases such as these, your policy can help your team to navigate the cases confidently and work with the client to either go onto a minimal payment plan or dismiss the debt altogether. This portion of the policy will look vastly different depending on your business structure and needs. It can also be changed to adapt to any growing needs your business incurs.
At DCA, we pride ourselves on collecting in cases where others can’t. Your policy lays the framework for business and regulation congruency and alignment. We are happy to provide a higher level of service that will keep you lean, efficient, and maintaining positive cash flow. We are an industry leader in the debt collection industry and have worked with hundreds of businesses in dealing with their delinquent accounts. For more information, please give us a call at 416-482-0988.