The process of collecting outstanding debts can be both frustrating and time consuming. Between making collection calls, sending debt collection letters, filing legal paperwork, and implementing some method of keeping track of each outstanding account, debt collection can quickly become a full-time job. The problem is that many small business owners simply don’t have the resources to devote a full-time effort to collecting outstanding debts, but they also can’t afford to allow customers to get away with not paying what they owe.
In these types of small business situations, having ways to automate the debt collection process can lead to improved collection rates, without dramatically increasing the amount of time that needs to be invested. While automation will take time to set up, and is certainly not a silver bullet that will guarantee successful collections, it can add a great deal to the success rate of any collection department.
Here are six ways that you might want to consider adding a form of automation to your collection process:
1. Software Communication
One of the easiest ways to save time and effort in the collection process is to make sure that all of the software you are using speaks the same language. Whether you are using high-end collection software or basic Microsoft Office programs to track your collection accounts, make sure that your software workflow keeps all of your data and information in the same place and formatted in the same manner.
Letting different staff members keep different collections accounts in different places using different software packages can create havoc when you need to quickly locate information about a particular debtor. Knowing that everything is kept in the same place and properly formatted for the software you need to use can be a great timesaver.
2. Automated Scoring
One automation concept that is a little more “outside-the-box” is the idea of establishing an automated way of ranking each of your outstanding accounts from the account that is most likely to pay to the account that is least likely to pay. The criteria for determining which account is most likely to pay can be structured in any way that you see fit, then the calculations can be performed and updated automatically.
Having an automatically ranked list of accounts to pursue will allow you to always focus your time on the accounts that are most likely to actually pay you. This will ensure that you are always devoting your resources to the best possible option.
3. Automate Your Collection Workflow
Probably the most common way to automate your collection process is by automating your collection workflow. This means that you establish a standard workflow of when to execute each step in your collection process. By using a scheduling or reminder program, you can automate the process of making sure that the specific workflow you have planned is followed.
4. Implementing an Autodialer
If you find yourself handling a large number of debts on a regular basis, you might want to consider unitizing an autodialer program. Autodialers are known for increasing the productivity and effectiveness of collection calls, and some are even capable of sending text messages to debtors. Making collection calls is one of the most frustrating and time consuming aspects of debt collection, so anything that can improve efficiency in this area will be a huge gain for the collector.
5. Integrated Payment Options
Another great way to automate the collection process is to accept payments through your website. This allows the debtor to make a payment at any time that is convenient for them. It also saves you the hassle of taking payments to the bank and potentially dealing with returned checks. Simply adding a secure credit card payment option to your website can make the payment end of the collection process a lot smoother.
6. Sub Out Your Collection Work
The final way to automate the collection process is for businesses that don’t have the time or the resources to invest in other forms of collection automation. Sometimes, simply subbing out the collection work to a commercial debt collection agency can save both time and money in the end. In this case, you can automate the process by having a deal in place with a debt collection company and already keeping the information they will need in a friendly format.
Whether you are adamant about collecting outstanding debts yourself, have staff members designated to collect debts, or prefer to sub out the process of debt collection, adding some automation to the process is in everyone’s best interest to ensure that debts are collected as quickly and efficiently as possible.