How to Outsource Collections to South Africa

Business Process Outsourcing, or BPO, has become a hot new industry in South Africa. With other countries experiencing rapid growth in this business sector, South Africa is in a position to offer more competitive prices for companies that wish to outsource their collections processes.

Things You'll Need

• Lawyer or attorney
• Accounts receivable data

Instructions

Outsource Accounts Receivable Collections to South Africa

1. Know that one of the benefits of outsourcing collections to companies in South Africa is the current deregulation of the telecom industry, which helps to keep expenses down for these companies. You should be able to negotiate a lower rate or commission due to the lower cost of overhead for many South African companies when compared to other outsourcing BPO companies around the world.

2. Recognize that an additional benefit to outsourcing collections to a company in South Africa is the number of languages these agencies can support, including German, French, Spanish, Portuguese and Italian. English is the official business language of this country, making it a key player for business from American industries as well.

3. Find out how any prospective collections agency will charge its fee. Depending on the company, you may be charged a flat rate per debt to be collected, a fee charged per collector working on your company's accounts or a commission rate determined by a fixed or variable percentage of the debt collected. Each of these payment systems has its benefits. You should analyze your current accounts receivable data to determine which pay system would benefit your company the most.

4. Ask any prospective collections company in South Africa for its debt recovery statistics. These records should indicate the success rate this particular company has seen in the recovery of other clients' debts. It should also indicate the varying levels of difficulty in relation to the collection of debts and at what level the company performs best.

5. Select a company that can provide you with additional data to help aid and support decision-making within your own company. An additional service of many collections agencies is the collection and analysis of accounts receivable data which may aid your company's credit department in redefining good and bad client risks.

Tips & Warnings

• With the BPO industry still in its infancy in South Africa, be sure to select a company that is well-versed in collections practices for the country in which you do business. If you are operating in and collecting debts from clients within the United States, any company you outsource to must follow laws set forth by the Fair Debt Collection Practices Act.