How to choose your debt collection partner in 2023

What should you focus on when choosing your new debt collection partner (debt collection agencyordebt collection attorney)? This is an important question that we at Collectia try to answer every year.

Of course, many things are standard and often repeat from year to year. In 2023, however, we believe there is one specific thing you should require your debt collection partner to provide for your business—in addition todebt collection.

Before you read on, let us state right away—yes, we are a debt collection agency, but we are trying to keep this article as objective as possible. The article therefore includes both debt collection agencies and debt collection attorneys as possible options.

This article is, of course, influenced by the fact that, as we enter 2023, the economic outlook appears bleaker than it did in 2022: rising interest rates, high inflation, rising unemployment, more delinquent payers, and morebankruptcies.

1. Debt Collection in Conjunction with Credit Checks

2023 is shaping up to be a tough year for many families and businesses. In 2023, the economy won’t be booming at the same pace as it has in the past few years.

All other things being equal, this will also mean that more individuals and businesses will have difficulty paying their bills, which could lead to bankruptcies. At Collectia, we are convinced that you therefore need to focus more closely on the financial situation of your current and prospective customers.

One solution to this could be implementing a credit check system that allows you to screen out potential bad payers and those prone to bankruptcy. At the same time, you should tighten yourcredit policytoward your existing customers if necessary.

2. Easy online access to your cases

It’s more important than ever to have a comprehensive understanding and overview of your cases, as well as detailed case histories. This is often best achieved throughonline accessto your debt collection cases —where you can create, track, and close your cases. Because in tough times, it’s especially important that you know your cases are moving forward—and that they’re being handled as promised.

If your debt collection agency or debt collection attorney is unable to offer this service, you should insist on receiving reports on your cases. However, this is not an ideal solution, as you will not have current, up-to-date data at your disposal.

3. The Cost of Debt Collection

The cost of debt collection services often ranges from zero kroner to a few thousand kroner. As a result, it can be difficult and confusing for most people to understand what they’re actually getting for their money. Often, the cheaper a case is, the larger the portion of the associated costs that goes to the debt collection agency or debt collection attorney.

You should carefully consider which option is best for you: “no cure, no pay,” an annual subscription (service agreement), or a solution where you pay a setup fee per case. There are no right or wrong choices when it comes to price. Price and quality often go hand in hand. This also applies to debt collection services.

4. The recurring question: Debt collection attorney or debt collection agency

That’s one of the questions we get asked most often. Should you choose a debt collection agency, or should you hire a debt collection attorney instead?

Let's be completely honest; there are pros and cons to both options. The choice of debt collection provider may be right for you, but wrong for your neighbor. 

We've previously written a guide on this topic:

5. References speak louder than reputation … (also) in the debt collection industry

Most businesses and individuals turn to Google when they need to determine whether a company is trustworthy to work with. There are also many different services and options available for obtaining background information on a company.

However, this can be a difficult area in the debt collection industry; and indeed, very few debt collection agencies and lawyers have particularly positive reviews when you do a simple Google search. This is (often) because these reviews consist of comments from debtors who owe money. So it’s not the client (the creditor) who’s leaving reviews on Google. But of course, it’s perfectly fair for them to express their opinions. The focus for all companies that provide debt collection services should be on treating debtors fairly and respectfully. Fair and respectful debt collection also increases the chances of recovering the client’s money.

We think you should find out if your prospective attorney or debt collection agency has references and client testimonials that you can read. These can provide valuable insight into what it’s like to be a client and what value you can expect to gain from the partnership.

Consolidate your debt collection and credit checks with Collectia

At Collectia, we have been providing accounts receivable management, debt collection, andcredit checks(for individuals and businesses) for more than 150 years.

Every day, we help small and large businesses, as well as major corporations, with theirpayment reminders, debt collection services, credit reports, KYC,monitoring, and much more. Of course, we’d also love to help you—whether you have 1 or 10,000 cases a year. Because at Collectia, you get more than 150 years of experience and perhaps Denmark’s smartest, easiest, and fastest online tool to get started with everything from debt collection to assessing your customers’ financial situations.

Contact us today for a no-obligation discussion about your options for debt collection in 2023.