How to Improve your Debt Collection Procedures
Hi, my name is Adam Stewart, Debt Collection Expert and owner of Debt Recoveries Australia.
I often get asked how to improve internal debt collection procedures and I am happy to help out as it is always the same answers that I give out to each client.
So here are my four quick tips to improve your internal debt collection procedures and increase profits:
1. Set Goals
Your debt collection team needs something to work towards, so give them specific, measurable goals to strive for, then incentivise them to reach these goals. Don’t be afraid of setting goals that are impossible under your current situation. You need to set benchmarks that are high enough to truly be a reach. Having goals that can be met in a few weeks or month are fine but they aren’t going to challenge you and your team to work towards something that seems unattainable. When ambitious goals are achieved you reap more than just an objective met. Your team develops a sense of accomplishment and empowerment that comes from meeting a challenge head on.
2. Increase Cash Flow
Again, set audacious goals, such as eliminating past-due accounts by a significant amount, say 90 per cent. The amount should be high enough to get the attention of most people and ambitious enough that it requires some work and planning to attain. Similarly, determine to significantly reduce the percentage of past due receivables, something up to 25 percent will provide a good start. By attacking both the amount of past due receivables and the percentage of receivables that are past due, you can also drive a significant reduction in DSO.
3. Friendly and Persistent Contact
Our philosophy here at Debt Recoveries Australia is “friendly, yet persistent”. The more contacts made the more receivables will be collected, but you don’t have to be aggressive. Look at how you are doing business now and figure out ways to work more contacts into your processes. Automation makes sending emails a cinch without bogging down your collector’s to-do lists. Set a goal with a modest increase in the number of calls but a larger increase in emails that, when combined, roughly doubles the amount of contacts you make with your customers.
4. Improve Quality of Contact
Your debt collection team is in constant contact with your customers, so take advantage of this. Give them training on sales and customer service techniques. They may even be able to upsell your customers while collecting the debts! Anything is possible.
The idea is to improve the quality of your interactions with customers, so you will want to focus on response times and accuracy. Reducing the number of invoices that are sent out with errors will help forestall payment deductions and so is another way to increase customer satisfaction and improve payment performance.
Good luck with your collection efforts and don’t forget how important debt collection is to your bottom line. If you still need help, outsource as soon as you can to a debt collection expert.
ADC Legal Litigation Lawyers is a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at firstname.lastname@example.org or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal.