With a new administration coming that has proven unfavorable to the collections industry in the past, and with the likelihood of increased defaults and charge-offs due to economic difficulties, accounts receivables companies are going to need to engage in best and new practices to maintain and grow their business. Any company presently seeing difficulties will need to enact general changes in administration, personnel, and technology to remain competitive in the coming downturn.
- Administrative. Collections groups are among the most notorious for bad business practices. In a modern business environment, particularly one so reliant on technology, there is no excuse for failure to account for and budget every penny coming in. With current accounting software, taxes should never be overdue, payroll should be on time every period, and remits to clients should always have a full accounting. Many businesses that fail do so not because of a revenue problem but because of the failure to maintain standard business accounting practices. Any other changes mentioned below will do a business with poor practices little to no good.
- Good personnel combined with the right technology. Modern accounts receivable environments can automate many standard collection processes in both initiating and receiving communications. Properly used, human interaction is almost unnecessary other than for system monitoring and non-typical debtor interactions. Single-platform OmniChannel & Multichannel management programs allow a single collector to engage in multiple forms of communications with debtors, as well as allow management to monitor collection activities and track performance.
- Alternative solutions. For some applications, offshore/nearshore relationships with vendors may be the right solutions for companies seeking to initiate change. Though some regulatory risks may be foreseen, personnel in other countries or areas may be more inexpensive than bringing people into a home office. Remote work for employees who have proven to be reliable and efficient may be the right solution as well.
Companies looking to improve practices need to engage in any and all options, beginning with standard good business practices as a cornerstone and build with modern technology and good personnel. Businesses also need to be willing to utilize novel practices to add to profitability and efficiency.