The number of conversations I have with agencies regarding the basic tenets of outsourcing is interesting. While most conversations are specifically related to licensing, more often than not, I find myself talking through the more general advantages of outsourcing – those benefits inherent to the idea of outsourcing regardless of industry.
While the next few paragraphs may seem remarkably similar to the information on your websites and other collateral material, I assure you they were not copied. The truth is that we are all selling the same idea. We are all providers of outsourced services.
Organizations that outsource corporate functions historically handled in-house (i.e., collections, licensing, IT, customer service, etc.) do so for a number of reasons. A few of the more common reasons are:
- Reduction of labor costs – An outsource provider with the right volume, operating efficiencies and cost structure is usually able to perform the particular operating function at a much lower cost than the organization could when using their own resources.
- Focus on core business functions – Your internal resources can focus more directly on your organization’s core competency when you reduce the distractions of operating functions that do not generate revenue by outsourcing them.
- Operational Expertise/Knowledge – An outsource provider can streamline an organization with operational best practices and a wide experience and knowledge base that would be difficult or time-consuming to develop in-house.
- Scalability – An outsource provider can help to manage a temporary or permanent increase or decrease in production levels.
- Reduce Liability – For some types of risks, one approach to risk management is to partner with an outsource provider who is able to provide a service that helps mitigate the associated risks.
Because each state has the right to enact its own set of collection laws and requirements, most jurisdictions have very different statutory regulations and application requirements. The regulations and application requirements are always changing. The cost savings that outsourcing can provide combined with the assurance that you are compliant in this ever-changing regulatory environment makes outsourcing a compelling option, especially if you are licensed in more than just a few states.
Here are a few questions to ask when selecting a licensing outsource provider:
- Is collection agency licensing the firm’s/individual’s core competency? Collection agency licensing is different than most other corporate registration. Additionally, the states are continually changing statutory regulations and application requirements. Just because the firm/individual has done some collection agency licensing or does other types of corporate licensing does not mean their experience will translate to your collection agency licensing project.
- How long has the firm/individual been providing collection agency licensing services? Relationships with the various state regulators are important and can only be developed over time. Furthermore, no two licensing projects are alike, and sometimes lessons are learned through mistakes made. You do not want the firm/individual you are using to learn lessons at your expense. Even small mistakes can significantly extend the time it takes to get licensed.
- Does the firm/individual guarantee their service? While no one can guarantee that a state will grant your organization the required debt collection license, they can guarantee that all license renewals and annual reports are filed on a timely basis. If the individual/firm that you are selecting fails to meet a license renewal deadline, and you have provided all necessary materials on a timely basis, get it in writing that they will pay any late fees or penalties that are incurred.
By Matt Pridemore
Call us at 888.445.8660, email us at [email protected], or visit us atwww.cornerstonesupport.com to discuss the details of your business and see how Cornerstone can support your overall compliance strategy.