“Collection Policy Procedures Generally Start In-House”
Depending on the size and complexity of the business, these first steps may range from a letter typed by a secretary, to a phone call from the company owner, to a set formal correspondence strategy implemented by a distinct credit and/or collection department.
An integral part, and a good first step, of a collection policy is determining whether your collection department will ultimately be in-house, or outsourced.
“Receivables Outsourcing Can Make Your Company Stronger”
Outsourcing can boost your collection effectiveness, as well as improve profitability by decreasing process and administrative costs, headcount, DSO and cost per transaction.Outsourcing the 1st-party collection function may seem like a small step to take in wading through the chaos of the current economy.
Outsourcing collections allows financial institutions to shift their previously committed focus to:
- Expand on areas with potential growth.
- Focus on the overall strategy to increase their bottom line.
- Eliminate or re-allocate resources focused on back-office processes.
- Invest saved time on efforts that build and grow customer relationships.
- Allow employee growth by opening more opportunities to focus on specialized areas other than collections.
Here are three cost-saving benefits to outsourcing your collections to a third party.
- Leverage scalability. Collection agencies have the collections process down to a science, deploying dialler technology and state-of-the-art staffing models to ensure that collection agents are making the maximum number of calls during peak evening and weekend hours. Moreover, creating a fleet workforce to burge the relation to benefit timely collection. Choosing to outsource collections allows you to take advantage of the scalability of an organization that is heavily invested in the business of collecting.
- Improved Control of Payment Cycle. Outsourcing 1st-party collections to an experienced firm will provide your organization access to:
Specialized collection management software.
Consistent, effective and efficient collection processes.
Robust, insightful reporting
- Improves Overall Business Performance: A scalable outsourced collection model saves cash.. Outsourcing also ensures your current staff can stay focused on strategic concerns. This shift from tactical to strategic management boosts performance and accountability. Financial transparency is also improved as a result of accurate reporting available through the outsourcing firm’s collection management systems