4 ways to automate the collections process
Ensuring that victims of crimes and civil suits receive the justice they deserve and the proper allocation of funds is a tough job. This work gets more complicated when government offices also take on the duty of collections agents. However, simple automation processes can streamline receivables management and make the entire system more efficient.
When the collections process is automated, employees have more time to focus on systems that need frequent human intervention and dedicated attention. It also creates a higher likelihood that payments will be received since all debts are handled through the system, ensuring that every single one is addressed and receives optimum routing.
However, some processes in the collections cycle benefit more from automation than others. Correspondence strategies, skip tracing, payment plans and standard phone calls should be the first to be automated because they ensure efficiency in the remainder of the process. Here are four practices to consider when automating these collection practices:
1. Correspondence strategies. Correspondence strategies describe the contact methods that government offices typically use to notify constituents of their debt, such as sending letters or other notices at predetermined intervals. While this strategy seems simple, automation can elevate collections correspondence to the next level. For example, automation can adjust the process based on specific responses received from debtors. If a constituent responds with a payment or asks for a payment plan to help fulfill the debt, the system can automatically update the account to show that payment was received or that a payment plan must be put into action. Receivables management solutions update activities while simultaneously freeing up account reps so they can focus on more-strategic duties.
2. Automatic skip tracing. The typical cell phone contract lasts two to three years, and when people upgrade their phone or move, they sometimes get a new phone number. Unfortunately for government offices, changing phone numbers often lead to bad or missing addresses and make proper contact nearly impossible. When constituents don't receive invoices, they can unknowingly miss payments, causing much more severe and unintended repercussions. Updated receivables management systems can flag bad or missing contact information and then automatically skip trace, or search for updated contact information, and populate the system once the information is located.
3. Effective payment plans. Payment plans are common in any form of debt collection, and government receivables are no exception. Online payment portals can help constituents negotiate a payment plan that fits their needs and meets the required timeline. By having the system handle the negotiation, terms are established based on predetermined factors, while account reps are entirely removed from the equation and don’t have to waste valuable time negotiating. These systems also closely monitor payment plans and only alert account reps when a payment is missed or multiple reminders fail to secure payment.
4. Automated phone contact. Humans tend to push off tasks that have a long deadline -- like paying debts -- unless they are reminded regularly. Debtors may try to use the “out of sight, out of mind” argument, but with a record of frequent contact in place, this excuse is easily refuted. Advanced receivables management systems will typically first send a warning letter, as opposed to a call, in order to reduce the number of regulated points of contact necessary. From there, phone contact with voice messages, or even text messages, may be sent. However, these forms of contact must follow a predetermined interval and provide the constituent with regular reminders without being invasive. Today's systems can pull automatic reports of this contact cadence to make sure agents and systems are performing as expected.
Automating the collections cycle allows government workers to focus on more strategic tasks, but the benefits don’t stop there. Automation creates operational efficiency in government offices, helping them to avoid outsourcing too early in the collections process, which often causes confusion. When government agencies use trusted technology for the entire receivables process, they become more consistent, fair and ultimately more successful.
Steve Ard is senior director government services at Ontario Systems.