By: Omar Abdul-Hafiz
Ideally, the customer would receive a notification about their bill and proceed to pay within the given timeframe. Unfortunately, however, this is not always the case, and this is when the collection lifecycle can easily start to get quite cumbersome.
But in order to appropriately address the collection process, we first need to consider two important points.
- Debt collection is a comprehensive process: While debt collection is primarily a financial activity, it does not strictly involve the financial department alone. Other departments in your company need to work together and collaborate in order to minimize customers’ payment delinquency.
- Customers are not all the same: You need to keep in mind that your customers come from all walks of life. Each of them has their own social and financial backgrounds, service usage habits, and billing history among several other factors. It follows then that each type of customer should be dealt with in a specific way depending on the context.
Considering these two points, what you need is an effectively integrated and standards-abiding system that works in harmony to streamline and maximize the success of your collections activities as well as minimize your losses.
To explain further, here are 6 important functions that need to cooperate together to improve your collection processes.
Create an effective CRM strategy
The saying goes: An ounce of prevention is worth a pound of cure. And this famous proverb applies beautifully in the context of collections management. Your company needs to implement a carefully planned CRM strategy in order to ensure the satisfaction of all your customers.
Creating an excellent CRM service by providing omnichannel support allows your customers to contact you through the channel of their preference whenever they need or want. An effective CRM system should also let you personalize your interaction with each customer and offer them solutions, payment plans and other services that are optimized to suit their specific needs. All of these factors make your customers more comfortable using your service and it shows that you’ve gone the extra mile to truly understand their needs and preferences.
Furthermore, to make it easier for customers to pay their bills, you should provide them a variety of payment methods through your various integrated channels, i.e. omnichannel, to settle their bills in a timely manner.
Collaborate with billing
It goes without saying that the billing and collections processes go hand in hand, and this necessitates smooth collaboration between them. Establishing automated coordination between these two systems is important for eliminating delay and avoiding discrepancies. It also prevents the duplication of efforts between the collection and billing departments.
Connect with financial
Financial management is an integral part of the billing and collections processes, and this requires a high level of collaboration between the two departments. Streamlining the collections process entails proper integration with an automated financial management system. This integration takes place in several ways including reflecting payments on your accounts receivables and cash planning and forecasting for proper cash management.
Establish a solid dunning process
Having a clear and solid dunning process is key in effective collections management. Your collections process needs to implement different dunning scenarios and plans by, for example, sending notifications and scheduling dunning call-backs.
A powerful collection management system should enable you to dynamically structure your hierarchies, customer types, subscription types, and service levels. Moreover, it should allow you to dynamically define and control the types of actions associated with each of those levels.
The dunning process should allow you to check your customer’s subscription status, payment status, and take further necessary procedures such as service disconnection in case of delinquency. The system should also enable you to apply different triggers and service changes based on the collection plan.
Follow through with dispute management
In cases of hard collection, you will need to take firmer procedures that include following up with your customer by phone or even by premise visits in some cases. You also need to track bad debt and assign cases of dispute to your staff of collectors or third-party collection agencies. Properly integrating your collections system with a dispute management system helps you decide on the best course of action for each collection case based on its context and details.
When all other alternatives have been exhausted and legal action becomes inevitable, it is important to ensure proper collaboration with your legal department. And this can best be achieved by integrating your collections management system with a legal matter management system.
A collection management system that is equipped with a powerful legal matter management module makes it simpler to prepare all necessary documents and send them directly to your legal department. It also makes it easier to assign cases to your staff of lawyers based on their experience. Additionally, it enables you to continuously monitor your lawyers’ performance and progress in the cases they are working on.
3rd party system integration
As a CSP, you will always need to collaborate and interact with other telcos, financial firms, legal firms, and other organizations in your local market and possibly abroad. To ensure smooth communication with these entities, you need to implement a system that is secure and easy to connect to third-party systems. Thus, your collections platform needs to use standard secure APIs for smooth enterprise integration.
Finally, as a general note, it is worth noting that a collections management system should also be able to work standalone. Moreover, it should also have an effective impact on the behaviour of other processes such as blacklisting on the CRM system.