With a global economy in place it's very likely that some of your clients are located in foreign countries, which means that some of your collections are also located in foreign countries. Selecting international collection agencies is crucial to your business success if you have a lot of overseas clients and need to perform international debt collection. But how do you pick the right 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.
In addition, hiring a local collection firm will show your clients that you're truly committed to recovering debt. It's a lot easier to ignore a phone call from another country than it is to ignore phone calls from international collection agencies, especially if the callers are local attorneys.
Another reason to use international collection firms with lawyers is that rules governing jurisdiction (meaning the place whose laws govern the transaction if it involves two different countries) differ from place to place, so while you may get away with hiring non-attorneys as debt collectors for your domestic clients, lawyers are essential when it comes to international debt collection. It's essential to ask when you're interviewing potential agencies what the jurisdiction is in the country in which you wish to collect debts, and how they handle it.
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.
If your business is spread out among many different regions, and you think it's too much of a bother to hire several different international collection agencies, keep in mind that most debt recovery agencies do not charge unless they successfully recover money. For this reason, you can hire several of them, say one for Europe, one for Latin America, and one for Asia, and only pay fees if and when they recover money. Since in-house collections people are not very likely to be successful with international debt collection, it's worthwhile to do this even if it means hiring more than one firm.
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.
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.
In addition, hiring a local collection firm will show your clients that you're truly committed to recovering debt. It's a lot easier to ignore a phone call from another country than it is to ignore phone calls from international collection agencies, especially if the callers are local attorneys.
Another reason to use international collection firms with lawyers is that rules governing jurisdiction (meaning the place whose laws govern the transaction if it involves two different countries) differ from place to place, so while you may get away with hiring non-attorneys as debt collectors for your domestic clients, lawyers are essential when it comes to international debt collection. It's essential to ask when you're interviewing potential agencies what the jurisdiction is in the country in which you wish to collect debts, and how they handle it.
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.
If your business is spread out among many different regions, and you think it's too much of a bother to hire several different international collection agencies, keep in mind that most debt recovery agencies do not charge unless they successfully recover money. For this reason, you can hire several of them, say one for Europe, one for Latin America, and one for Asia, and only pay fees if and when they recover money. Since in-house collections people are not very likely to be successful with international debt collection, it's worthwhile to do this even if it means hiring more than one firm.
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 prominent industry expert, business advisor and writer in collection agencies services for thirty years. He offers additional valuable tips and information on international debt collection.
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