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Improving The Collection Process

There are several ways that you can improve the collections process for your firm. There are obviously stakes when a company sends an account to collections. Thankfully, however, there are ways that a firm can manage their collection process in a more efficient manner. This article will explore some tips that will help companies get great results from collection efforts.

The first thing that a firm can do to improve their collection process is to make their procedures as automated as possible. This is an important thing to consider because automated procedures can increase a company's efficiency. A computer system can analyze various accounts and bring to light the accounts that are the riskiest. When the riskiest accounts are brought to light, this will allow account managers to focus on those accounts. This type of procedural effort will result in more efficient outcomes for a company when they try to recover losses. The most important feature of automated procedures is that the user can prioritize their workload.

The next thing that a company can do to enhance their collection process is to change how they use their resources. Mail is now the worst way to run a collection effort. No one checks their paper mail if they know that a creditor letter is coming. Your company should make use of more effective resources. There is the traditional call center approach, which has mixed results at best. Lately, a lot of firms have been having a tremendous amount of luck with electronic resources such as SMS texting and email. These resources are great because they only require a person to monitor the automated processes. However, one magic bullet is not going to solve all of your company's collection problems. Adequately watching all of your company's resources will help to make sure that the collections effort is going to be going smoothly. One way to see how well your resources work for your efforts is to set up a test of sorts. Perhaps use SMS messaging to send reminders to customers of their faulty debts instead of using the traditional mailing. You may find that one particular method works better for a particular section of customers.

Your company probably has tools that are used to measure data. These tools are called analytic suites and are very valuable for determining whether or not your company's collection efforts are effective. What are the odds that a particular customer is going to default on an account? What are the odds that a particular customer may only make a partial monthly payment? These types of probabilities are helpful for determining the dollar amount that is at risk for a particular account. Sometimes, these predictors help a firm determine whether or not they should send a certain bill to an outside agency in order to collect on it. These types of predictors can help an agency determine whether or not that their collection resources are performing adequately.

These are tools for the business side of a collections operation. There is also a very human side to collections. If there is a debt that a firm needs to collect upon, the agency should also see if it is feasible to allow the customer to settle for lower monthly payments. A collection agency should never harass a customer into paying their bill. In fact, a firm should be willing to work with a customer who is trying to get their debt under control. This is a small price to pay when considering that a person who files for bankruptcy often ends up costing a company a lot of money.

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