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The collection agency faces many challenges, including ever-changing technology and tightening oversight. Indeed, even locating a debtor and determining which communication method is most successful can be an overwhelming task. It’s important to regularly review your processes and procedures and pay close attention to your collection agency challenges. Strengthening and overcoming these areas quickly put your business on a fortunate path. Having discussed such challenges with our clients, below are some of the most common difficulties and potential solutions.
Absence of Real-Time Reporting
Debt collection is largely a game of chess – a strong and defined strategy is best for success. Agencies use various tactics to receive payments. By and large, the absence of real-time reporting amongst agents, and even the debtors directly, is a large shortcoming. Similarly, collection agencies have a hard time creating payment plans unique to each individual’s needs. Both of these items make the collection process complicated, cumbersome, and inconvenient.
Since the debt recovery process can be tense, make the process as easy as possible for your staff and the debtors. There are many collection software programs available – be sure to research your options and select a vendor that best suits your needs. Ensure they guarantee real-time reporting of all accounts and can assist with creating a debtor portal containing up-to-date information.
Choosing a payment partner for your agency is just as vital. Reviewing payments received instantly gives you peace of mind and helps forecast revenue with little effort. Merchant providers can also assist with payment negotiation – all without talking to an agent. Be sure you select a processor familiar with the ARM industry. Companies, such as Payment Savvy, will have a wide variety of payment options dialed in exactly for your agency needs.
Improper Debtor Account Status
It’s not uncommon for debtors to complain about receiving unwarranted calls from collection agencies. Many moan about receiving calls even after their debt has been successfully repaid. This can lead to complaints and sanctions against your agency. Both can add up quickly to dilute your hard-earned profits.
Be sure to properly train your agents to communicate effectively – it will go a long way to increase customer satisfaction and lessen any unforeseen scrutiny. Just as you researched software to provide you with real-time reporting, ensure your chosen provider updates account status instantaneously. If working with Payment Savvy, our long list of fully-integrated partners guarantees accurate and immediate payment updates no matter the time of day. A complete integration is valuable for a variety of reasons – learn more here.
Outdated Collection Strategies
Many agencies have time-tested policies that work well. While this is encouraging, there is always an opportunity for growth and improvement. As already discussed, it’s paramount agencies develop and update strategies regularly. This ensures you consider the ever-changing circumstances of compliant debt recovery and are aware of emerging technologies designed to make your job easier. This also helps avoid debtor excuses. While at times scary, change should be viewed as a forward movement and a good thing for you to have a handle on.
Lack of Debtor Tools
Most debtors willingly repay their outstanding balances if made easy. Individuals can shy away from collection attempts as they are afraid of being locked into a repayment plan that truly does not work with their budget. The superior solution here is to work with a payment processor offering true self-service payment options. From IVR to pay by text, the more ways you give a debtor to pay, the less cumbersome it becomes – for both your agency and the debtor – to close outstanding accounts with ease.
Overcoming Problems Faced by Collection Agencies
As we have read, for agencies to solve their challenges, they should use modern collection systems and strategies. These up-to-date tactics streamline operations and leave both parties satisfied. Some simple steps collection agencies can take to overcome challenges include:
- Send Automatic Statements – Debtors should receive statements and payment notifications per their preference. This could mean via snail mail, email, or even SMS text messaging. Whichever platform they decide on, make sure correspondence is immediate and regular while settling the account.
- Personalize Communication – Each debtor is unique. Therefore, using the same approach on all will not yield the same results across the board. No matter the channel of communication, make sure the correspondence is clear, kind, and custom.
- Provide Multiple Payments Methods – Obviously, you want your agency to accept credit cards, debit cards, and ACH payments. Don’t overlook HOW a debtor can pay you. Technology in this area is ever-evolving, and the more options you provide, the easier it is to get money in the door.
In conclusion, collection agencies realize the debt recovery process seems threatening to some individuals. This is exactly where most of the hiccups and challenges lie. Ensuring your business works with trusted and established ARM industry vendors goes a long way to help your agency maintain a strong and clear path to success.