Working Together to Improve
Pros and Cons of Hiring an Outside Collection Agency
- Hiring an OCA can allow staff to focus on other areas of the business.
- Staffing levels and costs can be contained while collection efforts are increased.
- Government staff can focus on customer service while the debt collector is the “bad guy.”
- Unloading uncollectible accounts to an agency can improve the government’s bad debt ratio.
- Remedies may favor in-house collections.
- Customer-centric tracking can allow government to withhold additional services or deny contracts to a delinquent customer.
- Service terminations can prompt payment
- Criminal penalties can be enforced
- Accounts can be collected based on internal priorities
- Agency fees can be expensive in comparison to in-house costs.
- Taxpayers may balk at the involvement of collection agencies as they are perceived to be adversaries rather than customer friendly.
- Lack of control over accounts, service, quality.
- Reputation of agencies can make outsourcing a tough sell to taxpayers and governing bodies.
- Issues with revolving debt may be problematic.
- You’re not the agency’s only client so your debt may not be prioritized as highly as you’d like.