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 first thing you need to know is that laws and customs vary wildly from country to country. One major reason to use international agencies is that they are likely to be experienced in the language, culture and laws of individual countries. That means if you have collections in India, you want an agency that has handled a lot of collections in India. If you also have collections in China and Poland, you may want to hire three separate agencies for each area.
Say you're a US business that has clients in Canada and Mexico, and 45% of your receivables come from outside your own country. In this case, it's definitely worth it to hire an international agency. True professionals will be familiar with local laws, languages and business practices.
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.
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.
When selecting an agency, make sure that they have experience in your industry. Collection solutions are not a one-size-fits-all prospect. Different strategies need to be used depending upon whether your clients are individuals, small businesses, or large businesses.
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 first thing you need to know is that laws and customs vary wildly from country to country. One major reason to use international agencies is that they are likely to be experienced in the language, culture and laws of individual countries. That means if you have collections in India, you want an agency that has handled a lot of collections in India. If you also have collections in China and Poland, you may want to hire three separate agencies for each area.
Say you're a US business that has clients in Canada and Mexico, and 45% of your receivables come from outside your own country. In this case, it's definitely worth it to hire an international agency. True professionals will be familiar with local laws, languages and business practices.
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.
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.
When selecting an agency, make sure that they have experience in your industry. Collection solutions are not a one-size-fits-all prospect. Different strategies need to be used depending upon whether your clients are individuals, small businesses, or large businesses.
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 agency services for thirty years. He provides additional helpful tips and information on international debt collection.
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